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SAN FRANCISCO PUBLIC LIBRARY 

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3 1223 06446 9829 





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San Francisco Public Library 

Governmont Information Center 
San Francisco Public Library 
100 Larkin Street, 5th Floor 
San Francisco, CA 94102 

REFERENCE BOOK 

Not to be taken from the Library 



Digitized by the Internet Archive 
in 2013 



http://archive.org/details/3minutes2001sanf 



City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, May 02, 2001 



10:00 AM 

Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:08 a.m. 

010039 [Airport Lease Agreement Modification for United Airlines, Inc.] 

Resolution approving Lease Modification Number Three for Lease No. 73-0066 between United Airlines, Inc. 

and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 

1/2/01, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

2/1/01 , TRANSFERRED to Finance Committee. New committee structure. 

2/7/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore Lakes. 

Deputy City Attorney; Gary Franzella, Assistant Deputy Airport Director, Aviation Management, Airport. 

Continued to February 2 1 , 2001 . 

2/21/01, CONTINUED TO CALL OF THE CHAIR. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, 

Deputy Airport Director for Public Affairs. 

4/4/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Airport Director, Public 

Affairs. 

Continued to May 2, 2001. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Peter Nardoza, Airport. 
Amended on lines 2 , after approving, and on line 1 7, after "approves, " by adding "retroactively " 
To Board for consideration on May 21, 2001. 
AMENDED. 

Resolution approving, retroactively, Lease Modification Number Three for Lease No. 73-0066 between United 
Airlines, Inc. and the City and County of San Francisco, acting by and through its Airport Commission. 
(Airport Commission) 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



rrmt.il at 7:19 l'\t 



Finance Committee Meeting Minutes May 2, 2001 



010052 [Airport Lease Agreement for Plot 6 to United Airlines, Inc.] 

Resolution approving lease agreement for Plot 6 between United Airlines, Inc. and the City and County of San 

Francisco, acting by and through its Airport Commission. (Airport Commission) 

1/10/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee. 

2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

2/7/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore Lakey, 

Deputy City Attorney. 

Continued to February 2 1 , 200 1 . 

2/21/01 , CONTINUED TO CALL OF THE CHAIR. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, 

Deputy Airport Director for Public Affairs. 

4/4/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Airport Director, Public 

Affairs. 

Continued to May 2, 2001. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Airport. 
Amended on line 3, after "approving, " and on line 1 7, after "approves, " by adding "retroactively. " 
To Board for consideration on May 21, 2001. 
AMENDED. 

Resolution approving, retroactively, lease agreement for Plot 6 between United Airlines, Inc. and the City and 
County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010667 | Airport Lease Agreement Modification for United Airlines, Inc.] 

Resolution approving Lease Modification Number Fifteen for Lease No. 82-0126 between United Airlines, Inc. 
and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 
4/1 1/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Airport. 
Continued to May 9, 2001. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



01 0590 [Instant Run Off Voting] 

Supervisors Leno, Ammiano 

Resolution urging the Department of Elections and the Budget Analyst to provide pertinent information 
regarding the cost savings and other logistical specifics of instant run off voting to support the Board of 
Supervisors consideration of a charter amendment for the November 2001 ballot. 
4/2/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Dr. Phillip Paris, Acting Director, Department 
of Elections; Steven Hill, Center for Voting and Democracy; Lloyd Schlegel; Kailijf Pluckner, Center for 
Voting and Democracy. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 2 Printed at 2:19 PM on 3/3/04 

3 1223 06446 9829 



Finance Committee 



Meeting Minutes 



May 2, 2001 



001783 [Release of Reserve Funds, San Francisco Apartment Association (Fiscal Year 2000-2001 Budget)] 
Supervisor Yee 

Motion releasing SI 00,000 placed on Board of Supervisors reserve for the legal assistance to property owners 

of limited means program. 

10/10/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

2/1/01 , TRANSFERRED to Finance Committee. New committee structure. Sponsor requests that this item be considered at the May 2. 

2001, meeting. 

Heard in Committee. Speakers: Supervisor Yee; Harvey Rose, Budget Analyst; Janan New, San Francisco 
Apartment Association; Rose Tsai, Association of Homeowners; Sonia Ng, Association of Homeowners; Floyd 
Brown, Jr.; Female Speaker; Tom Ramm, Small Property Owners; Female Speakers (4); Male Speaker; 
Ernestine Weiss; Mr. Chow; Male Speaker; Jeanette Woo, Association of Homeowners; Male Speaker; Joanne 
Ma; Mr. Yee; Edward Harrington, Controller. 

Amended to require the San Francisco Apartment Association to report back to the Finance Committee by 
December 31, 2001, as to the results of the first six months of the new program. 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Leno, Peskin 
Absent: 1 - Gonzalez 



010554 [Fiscal Year 2001-2002 Budget for the Board of Supervisors.] 

Motion submitting for approval the Fiscal Year 2001-2002 Budget by the Board of Supervisors. (Clerk of the 
Board) 

(Fiscal impact.) 

4/4/01, RECEIVED AND ASSIGNED to Finance Committee. 

4/25/01, CONTINUED. Speakers: None. 

Continued to May 2, 2001. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 2 - Leno, Peskin 
Absent: 1 - Gonzalez 



01 01 05 [Geographic Information System Data License Fees] 
Mayor 

Ordinance amending the San Francisco Administrative Code by adding Section 8.40 to authorize the 

Department of Public Works, or any other department responsible for administering the City and County of San 

Francisco's Geographic Data Services Program, to charge license fees for the use of the City's Base Map 

Geographic Information System ("GIS") data and ratifying prior fees. (Public Works Department) 

1/17/01, RECEIVED AND ASSIGNED to Transportation and Land Use Committee. 

2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

2/28/01, CONTINUED TO CALL OF THE CHAIR. Heard in Committee. Speakers: Harvey Rose, Budget Analyst. Douglas 1 egg, 

Finance and Budget Division. Department of Public Works; Jeffrey Johnson. Office of Geographic Data Services. Department of Public 

Works; Dcnise Brady, Deputy Director, Department of Telecommunications and Information Services; Erin McGrath. Mayor's Budget 

Office, Theodore Lakcy, Deputy City Attorney. 

4/2/01, SUBSTITUTED. The Mayor submitted a substitute ordinance bearing new title 

4/2/01, ASSIGNED to Finance Committee 

Heard in Committee. Speakers: Harvey Rase, Budget Analyst, Edward Harrington, Controller, Tin,.. 

Lakcy, Deputy City Attorney; Douglas Legg, Department oj Public Works 

Amendment of the Whole prepared in Committee 

AMENDED, AN AMENDMENT OK THE WIIOI.K BF.AKIM, M ■ \\ lilt i . 



City and County of San Francisco 



rrinlrdal ::IV TV 



Finance Committee Meeting Minutes May 2, 2001 

Ordinance amending the San Francisco Administrative Code by adding Section 8.40 to ratify all fees 
previously collected by the City under the City's Geographic Information System ("GIS") data license 
agreements, entered into since July 1, 1998, and before the effective date of this ordinance. (Public Works 
Department) 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010588 [Appropriation, funding for Geographic Data Services Program] 

Ordinance appropriating $38,676 of Geographic Information System License Fee Revenues for the 
development and administration of the Geographic Data Services Program for the Department of Public Works 
for fiscal year 2000-01. (Mayor) 

(Companion measure to File 010105.) 

4/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Douglas Legg, Department of Public Works; 

Jeff Johnson, Department of Public Works; Eric Sieman, DTIS. 

Amended by replacing "538,676" with "537,600" throughout the ordinance. 

AMENDED. 

Ordinance appropriating $37,600 of Geographic Information System License Fee Revenues for the 

development and administration of the Geographic Data Services Program for the Department of Public Works 

for fiscal year 2000-01. (Mayor) 

(Companion measure to File 010105.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010363 [Acquisition of Noise Easements for South S.F. Unified School District] 

Resolution authorizing the acquisition of six noise easements for schools owned by the South San Francisco 
Unified School District. (Real Estate Department) 
4/10/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers; Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real 
Estate Division, Department of Administrative Services. 
Amended to delete lines 13 and 14. 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010652 [Withdrawal of five (5) property owners in the City of Pacifica from noise insulation program and 
delivery of quitclaim deeds to said property owners] 

Resolution authorizing the conveyance of five (5) quitclaim deeds to property owners in the City of Pacifica to 

rescind Grants of Easement (noise easement deeds) previously acquired by San Francisco. (Real Estate 

Department) 

4/10/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property. Real 
Estate Division, Department of Administrative Services. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 4 Printed at 2:20 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



May 2, 2001 



010660 (Extension and Renewal of Nine (9) Existing Leases for Public Health] 

Resolution authorizing extension and renewal, on a month-to-month basis, not to exceed twelve months, of 
certain existing leases of real property required by the Department of Public Health. (Real Estate Department) 
4/1 1/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real 
Estate Division, Department of Administrative Services. 

Amended on page 1, line 3, by deleting "and renewal. " Further amended on page 1, line 10, by deleting 
"renewal and. " 
AMENDED. 

Resolution authorizing extension on a month-to-month basis, not to exceed twelve months, of certain existing 
leases of real property required by the Department of Public Health. (Real Estate Department) 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010654 [Lease of City-owned land to S.J. Amoroso Properties] 

Resolution authorizing a ten year lease of Public Utilities Commission land between the City and County of 
San Francisco and S. J. Amoroso Properties, in Santa Clara County. (Public Utilities Commission) 
4/6/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Gary Dowd, Public Utilities Commission. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2: .VI I'M 



Finance Committee Meeting Minutes May 2, 2001 



010669 [Agreement of Purchase and Sale for Real Estate at 30 Van Ness Avenue (Certificates of Participation, 
Series 200A and Taxable Series 2001 B)] 

Resolution authorizing the execution and delivery of the Agreement of Purchase and Sale for Real Estate (the 
"Original Agreement"), as amended by a First Amendment to Agreement of Purchase and Sale for Real Estate 
(the "First Amendment" and together with Original Agreement, the "Purchase Agreement"), between the City 
and County of San Francisco (the "City"), as buyer, and the Herbst Foundation, Inc. (the "Seller"), as seller 
(including certain indemnities contained therein), for the purchase of real property and improvements thereon 
consisting of a five-story office building located at 30 Van Ness Avenue, San Francisco (collectively, the 
"Property"); approving the forms of an office lease between the City, as landlord, and the Seller, as tenant (the 
"Herbst Lease") and an office lease between the City, as landlord, and Merriman Brothers, as tenant (the 
"Merriman Lease") (collectively, the "Office Leases"); approving the execution and delivery of certificates of 
participation to finance the acquisition of and improvements to the Property; approving the form of the Project 
Lease between the City and a Trustee (including certain indemnities contained therein); authorizing the 
selection of a Trustee; approving the form of the Trust Agreement between the City and a Trustee (including 
certain indemnities contained therein); approving the form of the Official Notice of Sale and Notice of 
Intention to Sell for the Series 2001 A Certificates and Taxable Series 2001B Certificates (as defined herein); 
approving the form of the Official Statement in preliminary and final form; approving the form of a Continuing 
Disclosure Certificate; authorizing the filing of a validation action validating the execution and delivery of the 
certificates of participation; authorizing reimbursement of certain expenditures; authorizing the payment of 
costs of issuance; adopting findings under the California Environmental Quality Act and findings to the City 
Planning Code Section 101.1; and ratifying previous actions taken in connection therewith. (Mayor) 

(Fiscal impact.) 

4/11/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real 
Estate Division. Department of Administrative Services. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010666 (2001 Affordable Housing Bond Sale] 

Resolution authorizing and directing the sale of not to exceed $40,000,000 of City and County of San 
Francisco General Obligation Bonds (Affordable Housing) Series 200 1C and City and County of San 
Francisco Taxable General Obligation Bonds (Affordable Housing) Series 2001D; prescribing the form and 
terms of said Bonds; authorizing the execution, authentication and registration of said Bonds; providing the 
appointment of depositories and other agents for said Bonds; providing for the establishment of accounts 
related thereto; approving the forms of Official Notice of Sale of Bonds and Notice of Intention to Sell Bonds; 
directing the publication of the Notice of Intention to Sell Bonds; approving the form and execution of the 
Official Statement relating thereto; approving the form of the Continuing Disclosure Certificate; approving 
modifications to documents; ratifying certain actions previously taken; and granting general authority to City 
officials to take necessary actions in connection with the authorization, issuance, sale and delivery of said 
Bonds. (Mayor) 
4/1 1/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Dave Sanchez, Deputy City Attorney; 
Supervisor Daly; Joe La Torre, Mayor's Office of Housing; Edward Harrington, Controller. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 6 Printed at 2:20 PM on 3/3/04 



Finance Committee Meeting Minutes May 2, 2001 



ADJOURNMENT 



The meeting adjourned at 3:03 p.m. 



City and County of San Francisco Printed at 2:2U I'M M 3/3/94 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



CITY AND COUNTY '^^^MfJ Sl 0F SAN FRANCISCO 

BOARD OF SUPERVISORS 

S 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 

April 26, 2001 

TO: ^Finance Committee DOCUMENTS DEPT. 

FROM: Budget Analyst ^ *y _ 7 9QQ1 

SUBJECT: May 2, 2001 Finance Committee Meeting SAN FRANCISCO 

t, 1 vi m oooQ PUBLIC LIBRARY 

Item 1 - File 01-0039 

Note:. This item was continued by the Finance Committee at its meeting of April 4, 
2001. 

Department: Airport 

Item: Resolution approving Lease Modification No. 3 for Lease 

No. 73-0066 between United Airlines, Inc. and the City, 
acting by and through its Airport Commission. 

Lessor: City and County of San Francisco 

Lessee: United Airlines, Inc. 

Term of Lease: The subject lease was first approved in 1973 for an initial 

20-year term, to expire in 1993, with two 10-year options at 
the discretion of the lessee. 

Right of Renewal: As noted above, the 20-year lease provided for two 10-year 
extensions at the discretion of the lessee, for a total lease 
period of up to 40 years. In 1993, United Airlines exercised 
its first 10-year extension, which is due to expire in 2003. 

Description: On December 5, 2000 the xAirport Commission approved 

Modification No. 3 of Lease 73-0066 between the Airport 
and United Airlines, Inc. Under lease 73-0066, United 
Airlines currently occupies 129.75 acres of land used by 
United Airlines for employee parking and its Maintenance 
Operations Center (MOC) for aircraft maintenance. The 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



subject lease was originally approved in 1973 for an initial 
term of 20 years, with two 10-year extension options at the 
discretion of the lessee. According to Ms. Dorothy Schimke 
of the Airport, in 1993 United Airlines exercised its first 
ten-year option, which is due to expire on June 30, 2003. 
The property leased by United Airlines is located at the 
intersection of San Bruno Avenue and the Bayshore 
Freeway. 

The Airport is currently developing a Multi-Modal 
Transportation Center, which includes, among other 
elements, expansion of short-term Parking Lot DD, which 
is adjacent to the property leased by United Airlines, and 
the extension of the AirTrain (the Airport fight rail system) 
to the Multi-Modal Transportation Center and Parking Lot 
DD (see Attachment I, provided by the Airport, for a 
description of these projects). According to Ms. Schimke, 
Parking Lot DD currently consists of Airport employee and 
Airport tenant employee parking. Ms. Schimke advises that 
Parking Lot DD will be expanded and initially used for 
additional employee parking, and upon completion of the 
Multi-Modal Transportation Center, the expanded portion 
of Parking Lot DD would be converted for long-term public 
parking. Ms. Schimke advises that in order for the Airport 
to complete such an expansion, the Airport needs access to 
Parking Lot DD through a portion of the property currently 
leased by United Airlines. Under the proposed Modification 
No. 3 to Lease 73-0066, United Airlines has agreed to 
relinquish to the Airport 0.74 acres of property. In return, 
the Airport has agreed to provide United Airlines with 
additional space of up to 2.61 acres for employee parking, 
as discussed below. 

The proposed transfer of acreage under the subject lease 
Modification No. 3 would take place in the two following 
phases: 

(1) Ms. Schimke reports that on December 1, 2000, United 
Airlines relinquished 0.74 of its total 129.75 in leased 
property back to the Airport, leaving 129.01 acres under 
the subject lease with United Airlines (see Comment No. 
2). 

(2) In exchange for relinquishing the 0.74 acres discussed 
above, the Airport agreed to provide United with 150 
additional parking spaces for United Airlines employees 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Rent paid by 
United Airlines 
to the Airport: 



that will be added to the lease at a future date, totaling 
a maximum of 2.61 acres. However, Ms. Schirnke 
advises that the amended lease with the Airport will not 
include the additional acreage until the Airport 
completes the Multi-Modal Transportation Center and 
the AirTrain, in approximately four to six years, as 
explained in Attachment I to this report. During the 
interim period, between the time that United Airlines 
relinquished 0.74 acres of space on December 1, 2000 
and the completion of the Multi-Modal Transportation 
Center and the AirTrain Extension, the Airport has 
granted United Airlines a month-to-month permit, 
effective December 1, 2000, for approximately 2.61 acres 
to accommodate the additional employee parking. 
Because the guideway for the AirTrain will require use 
of part of the 2.61 acres, the Airport will not be able to 
determine the exact amount of additional space that will 
be added to the existing lease until the Multi-Modal 
Transportation Center and the AirTrain are completed. 
Therefore, proposed lease Modification No. 3 states that 
the Airport and United Airlines agree to expand the 
existing lease "after the Multi-Modal Transportation 
Center and the AirTrain Extension are completely 
designed and constructed... without the requirement of 
formal amendment to the Lease or the approval of any 
party... as to the dimensions and configuration of such 
space." 



Rent for the additional space to be charged by the Airport 
to United Airlines will be at the same rate of $35,879.50 
per acre charged for the existing lease, both when the space 
is under permit and after it is added to the lease. The rate 
of $35,879.50 first became effective in 1998, according to 
Ms. Schirnke. 



Ms. Schirnke advises that when the first 10-year lease 
extension with United Airlines was negotiated in 1993, 
United Airlines and the Airport agreed to an annual rent of 
$32,617.73 per acre for the first five years of the 10-year 
extension, with one increase of $3,261.77 to an annual rent 
of $35,879.50, effective July 1, 1998, for the remaining five 
years of the 10-year extension, expiring on June 30, 2003. 
Therefore, during the first 10-year extension between 1993 
and 2003, the rent charged to United Airlines will have 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Permit: 



Compliance with 
City Laws: 



Comments: 



increased by only approximately 10 percent, or by 
approximately an average of one percent per year. 

Under the proposed lease Modification No. 3, the exchange 
in space would result in a maximum net increase of 1.87 
acres used by United Airlines in this location (the 2.61 
acres in new parking for United Airlines employees, less 
the 0.74 acres relinquished back from United Airlines to 
the Airport). 

According to Ms. Schimke, the month-to-month permit 
granted to United Airlines for the 2.61 acres allows the 
Airport to modify or terminate the permit with 30-days 
notice. Ms. Schimke advises that since the Airport must use 
portions of the 2.61 acres under permit to United Airlines 
for construction of the AirTrain extension, the Airport will 
reduce the number of acres provided to United Airlines 
under permit as needed. 

In addition, the proposed lease Modification No. 3 would 
update the existing lease to reflect changes to the 
Administrative Code and other City requirements, such as 
provisions requiring compliance with the ban on tropical 
hardwoods and virgin redwood, the MacBride Principles 
related to employment inequity in Northern Ireland, the 
Non-Discrimination in City Contracts and Equal Benefits 
Ordinance, and the Minimum Compensation Ordinance. 

1. As previously noted, the proposed lease modification 
would ultimately result in a maximum net increase of 1.87 
acres of space for United Airlines. The net rent increase 
that the Airport would receive annually from United 
Airlines is $67,095 per year, as shown in the table below. 
However, the increased acreage to be added to the lease 
will most likely be less than the estimated 1.87 acres since 
the parking parcel now under permit will be reduced by 
AirTrain construction as described above. Ms. Schimke 
advises that the Airport will not add more than 2.61 acres 
to the lease with United Airlines. The estimated net 
increased rent of $67,095 to be paid by United to the 
Airport is shown in the table below. The net increased rent 
applies immediately to the estimated 2.61 acres provided to 
United Airlines under a month-to-month permit effective 
December 1, 2000, as well as to the final acreage after it is 
incorporated into the existing lease. As stated previously, 
Ms. Schimke reports that the Airport expects to complete 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



the Multi-Modal Transportation Center and the AirTrain 
Extension in approximately four to six years, as stated in 
Attachment I, provided by the Airport. 





Annual Cost 
per Acre 


Total 
Acres 


Annual 
Airport Revenues 


Existing Lease 


$35,879.50 


129.75 


4,655,365 


Space relinquished by 
United Airlines to 
the Airport 


$35,879.50 


(0.74) 


(26,550) 


Estimated additional space 
to be leased by 
United Airlines 


$35,879.50 


2.61 


93,645 


New Total 


131.62 


$4,722,460 


Net Increase 


1.87 


$67,095 



2. As stated previously, Ms. Schimke advises that on 
December 1, 2000, United Airlines relinquished 0.74 acres 
of space leased under the existing contract. In addition, the 
Airport issued to United Airlines a permit, effective 
December 1, 2000, to use an additional 2.61 acres for 
employee parking, at which point United Airlines began 
paying additional rent to the Airport based upon the 
additional 2.61 acres. Therefore, the Budget Analyst 
recommends that the subject resolution be amended to 
provide for retroactive authorization. Ms. Schimke advises 
that the permit to United for use of the 2.61 acres will be 
terminated when the space is formally incorporated into 
the existing lease. 

3. As noted above, United Airlines will be charged rent for 
the additional 2.61 acres at the same rate of $35,879.50 per 
acre charged for the existing lease both when the space is 
under permit and after it is added to the lease. Ms. 
Schimke advises that the rate of $35,879.50 first became 
effective July 1, 1998. The Budget Analyst notes that not 
only has this rent of $35,879.50 per acre not been increased 
since July 1, 1998, or for 2.5 years, but additionally, over 
the 10-year lease extension, which expires June 30, 2003, 
the rental increases to United Airlines in total have 
averaged approximately one percent per year over 10 years, 
or a total increase of $3,261.77, which adjusted the 1993 
rent of $32,617.73 per acre to the current rent of $35,879.50 
per acre. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

5 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Had this rent amount been adjusted upward according to 
the total 11.24 percent increase in the Consumer Price 
Index (CPI) between July 1, 1998 and January 2001, the 
rent would have increased by $4,302.86 to an annual rent 
of $39,912.35 per acre. Furthermore, the Budget Analyst 
questions why the Airport does not require that United 
Airlines pay the Airport an adjusted rent based on current 
fair market rent for the net additional 1.87 acres to be used 
by United Airlines (the 2.61 acres in new employee parking 
for United Airlines, less the 0.74 acres relinquished back by 
United Airlines to the Airport). 

According to Ms. Schimke, the Airport agreed to the 
proposed exchange of property with United Airlines and the 
rental rate of $35,879.50 because the 0.74 acres United 
Airlines has relinquished to the Airport is critical to the 
completion of the AirTrain Extension and the Multi Modal 
Center. The Budget Analyst notes, however, that the net 
additional 1.87 acres provided to United Airlines for 
employee parking is apparently important to United 
Airlines since United Airlines has requested the additional 
land from the Airport. Therefore, the Budget Analyst 
questions why the Airport does not require United Airlines 
to pay the current fair market value for the additional land 
that United will receive and why the rent being charged to 
United Airlines has only been increased by an average of 
one percent annually over the 10-year lease extension 
period, which expires on June 30, 2003. 

4. Ms. Schimke also states that the original 1973 lease with 
United Airlines contains no provisions for annual 
adjustments in rent during the initial 20-year term of the 
lease, or during each of the subsequent two 10-year 
extension periods. As discussed in Comment No. 3 above, 
the existing lease provides that before each of the 10-year 
extensions, the Airport and United Airlines will negotiate a 
revised rent based upon Airport appraisals of the land's fair 
market value at that time. 

5. In response to the Budget Analyst's report, Ms. Schimke 
advises that the Airport has negotiated the proposed lease 
Modification No. 3 to accommodate the Airport. The Airport 
went to United Airlines with the request for the Airport to 
take back from United Airlines 0.74 acres of property to 
which United had absolute rights under its long-term lease, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



according to Ms. Schimke. The Airport's providing of up to 
2.61 acres of Airport property to United Airlines, which 
would enable United Airlines to provide its employees an 
additional 150 parking spaces at the same rate of the 
existing lease, was the 'price' for United Airline's 
agreement to relinquish the 0.74 acres back to the Airport, 
according to Ms. Schimke. Ms. Schimke states that the 
Airport was not in a bargaining position to demand pricing 
concessions from United as part of this deal. Ms. Schimke 
reiterates that the 0.74 acres that the Airport will obtain 
from United Airlines is necessary for the completion of the 
Airport's Multi-Modal Transportation Center and AirTrain 
extension (light rail system). In addition to the important 
public policy goals of the Multi-Modal Transportation 
Center, according to Ms. Schimke, the Parking Lot DD 
portion of the project (see Attachment I) has significant 
revenue implications. Ms. Schimke anticipates that the 
expansion of Parking Lot DD (the expansion will initially 
be used for Airport employee parking and Airport tenant 
employee parking, and eventually for public long-term 
parking) allowed by the recapture of the 0.74 acres from 
United Airlines will generate additional parking revenues 
to the Airport conservatively estimated at $1,017,600 for 
the first full year of operation, rising to approximately $3 
million per year when the lot reaches capacity. Ms. 
Schimke advises that these parking revenues will increase 
significantly once the lot converts the Airport employee and 
Airport tenant employee parking to public long-term 
parking when the Multi-Modal Transportation Center is 
completed. 

6. Under the terms of the lease, not until the current 10- 
year lease extension expires on June 30, 2003 will the 
Airport, in conjunction with the Department of Real 
Estate, appraise the value of the land and negotiate with 
United Airlines a revised rent based upon the land's fair 
market value at that time, as of July 1, 2003. 

7. As previously noted, in 1993, under the first 10-year 
extension, the Airport and United Airlines negotiated an 
adjusted rent for this first 10-year extension, effective July 
1, 1993, to increase the annual rent by $3,261.77, from 
$32,617.73 per acre to $35,879.50 per acre annually, 
effective July 1, 1998. This one and only rent increase 
represents an average increase of only one percent 
annually, or a total increase of 10 percent over the 10-year 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



lease extension. This mid-term adjustment was not 
intended to reflect fair market value at mid-term, according 
to Ms. Schimke. While the Budget Analyst acknowledges 
that the 1973 original lease contained no provisions for 
annual rent adjustments, nothing precludes the Airport 
from negotiating a rent adjustment at this time, since the 
Airport is requesting approval from the Board of 
Supervisors of a proposed new lease Modification No. 3, 
which would provide United Airlines with 1.87 additional 
acres of Airport property. 

8. At the February 7, 2001 Finance Committee meeting, the 
Airport Director stated that in negotiating the proposed 
lease modification with United Airlines, the Airport took 
into consideration an additional $220,000 for security and 
related costs that United Airlines reports it would be 
required to pay to operate the additional 2.61 acres 
provided under the subject lease modification. According to 
Mr. Gary Franzella of the Airport, United Airlines reports 
that the $220,000 in additional costs would result from the 
need to provide two security guards on the premises, seven 
days a week, which would require United Airlines to 
employ six full-time equivalent (FTE) employees. 

9. The Finance Committee requested at its February 7, 
2001 meeting that the Budget Analyst attempt to 
determine a fair market value for the 150 parking spaces to 
be used for United Airlines employee parking in the 2.61 
acres of additional space to be provided to United Airlines 
under the proposed lease modification. 

According to the Ms. Schimke, the Airport currently 
charges $48 per parking space permit, per month, or $576 
annually, for comparable space used by airlines for 
employee parking (parking with no bus service), which the 
Airport provides to airlines on a per space permit basis. Ms. 
Schimke advises that this rate is based on the Airport's 
Rates and Charges for Airlines, which is adjusted and 
published annually by the Airport. Since the Airport can in 
some cases rent on average two permits per parking space 
(since the Airport is open 24 hours per day), the average 
monthly value of a parking space for airline employees is 
$96 per month, according to Mr. Franzella. At this rate of 
$96 per month, the total value of the 150 subject parking 
spaces would be $14,400 per month, or $172,800 annually. 
Under the proposed lease modification, based on the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



$93,645 rental revenue per year payable by United Airlines 
to tbe Airport for tbe 2.61 acres which provide United 
Airlines with 150 parking spaces, United Airlines would 
pay to the Airport an average of approximately $52.03 per 
month per parking space, or approximately $7,804 per 
month ($93,645 annually) for the entire 2.61 acres. This 
$52.03 is approximately $43.97 less per parking space per 
month ($96 less $52.03) than the average monthly rate of 
$96 per month per parking space that the Airport is 
currently charging for airline employee parking. Ms. 
Schimke advises that in addition to the 150 parking spaces, 
the subject 2.61 acres includes circulation space for 
vehicles. Under the subject lease and proposed 
modification, United Airlines would not be able to 
reconfigure the parking layout to create additional parking 
spaces, according to Mr. Franzella. 

Furthermore, based on a comparison of parking available in 
the general vicinity of the Airport, CalTrans currently 
charges on average $61 (approximately $59 to $63 per 
month) for leased paved parking spaces approximately the 
same size as the subject 150 parking spaces to be provided 
to United Airlines at the Airport 1 ), according to information 
provided to the Budget Analyst by the Division of Real 
Estate. 

In addition, if the Airport were to have to dedicated the 
2.61 acre area for public parking use instead of for United 
Airlines employee parking, which in fact the Airport 
intends to eventually do in its Parking Lot DD, which is 
adjacent to the 2.61 acres being provided to United 
Airlines, then the Airport could have charged its current 
rate of $15 per day per space 2 for long-term public parking, 
or approximately $450 per month ($5,400 annually), 
according to Ms. Schimke. The Airport collects an average 
net revenue of $222 per parking space per month ($2,664 
annually) from long-term public parking, accounting for 
operating costs and fluctuations in demand, according to 
Mr. Franzella. Mr. Franzella advises that the Airport 
would not have elected to use the subject 2.61 acres for 
long-term public parking due to the property's location and 



1 The Real Estate Division reports that CalTrans pays a maximum of $0.20 per square foot of 
comparable paved parking, which when multiplied by the average Airport-reported 315 square-feet 
of each of the subject 150 parking spaces, would result in a monthly parking rate of $63. 

2 Ms. Schimke advises that the Airport charges for long-term parking $1 for every 15 
minutes, with a maximum daily fee of $15. 

BOARD OF SUPERVISORS 
BUDGET, ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



the investment that would have been required to construct 
the infrastructure necessary for long-term parking. 

A comparison of such parking charges are as follows: 



Parking Use 


Monthly 

Rate 

Charged per 

Space 


Total 

Annual 

Rent for 

150 Spaces 


Proposed Lease Modification, 

2.61 acres including 150 parking spaces for the 
proposed rent being charged to United 


$52.03 


$93,645 


CalTrans Leased Parkins Space 
in Vicinity of Airport (average rent) 
for 150 parking spaces 


$61 


$109,800 


Comparable Charges by the Airport for 

Airline Employee Parking for 150 parking space 
(provided per space, based on two permits each) 


$96 


$172,800 


Long-Term Airport Public Parking 

(Approximate Net Revenue for Airport 
for 150 parking spaces) 


$222 


$399,600 



As shown in the above table: 



Based on 150 parking spaces, the proposed $93,645 
annual rent to be charged to United Airlines under the 
proposed subject lease modification would be $16,155 
less than the approximate annual rent of $109,800 
charged by CalTrans for similar parking spaces in the 
vicinity of the Airport. 

Moreover, according to the Airport, the annual $93,645 
rent to be charged to United Airlines under the proposed 
subject lease modification charged for the subject 150 
parking spaces under the proposed lease modification, 
including additional vehicle circulation space, would be 
$79,155 less than the $172,800 annual amount charged 
by the Airport per space (based on an average of 2 
permits per space) to airlines for permits for airline 
employee parking. 

Further, the proposed annual rent of $93,645 to be 
charged by United Airlines under the proposed subject 
lease modification would be $305,955 less than the 
estimated $399,600 in net revenue that the Airport 
earns from 150 long-term parking places, not accounting 

BOARD OF SUPERVISORS 
BUDGET^ ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



for any initial investment costs which, would be required 
by the Airport for long-term parking. 

10. Based on the data obtained in response to the Finance 
Committee's question concerning the value of parking 
spaces included in the proposed lease with United Airlines: 

a) under the proposed lease modification the rent charged 
to United Airlines of $52.03 monthly for each of the 150 
parking spaces would be 14.7 percent less than 
comparable parking in the vicinity of the Airport of 
approximately $61 monthly for the parking leased by 
CalTrans and 45.8 percent less than the monthly $96 
the Airport currently charges Airlines per employee 
parking space, based on an average of two permits per 
space; and, 

b) under the proposed lease modification the rent charged 
to United Airlines of $52.03 monthly for each of the 150 
parking spaces would be 76.6 percent less than the 
average $222 monthly net revenue per space that the 
Airport currently receives for long-term Airport public 
parking. 

11. The Budget Analyst based the above calculations on the 
assumption that, under the proposed lease modification, 
the United Airlines would be provided 150 new parking 
spaces, based upon information received from the Airport. 
However, the Airport now advises that United Airlines will 
receive a net total of 75 new parking spaces (the 150 
parking spaces provided in the subject 2.61 acres less 75 
parking spaces under the 0.74 acres which United Airlines 
has agreed to relinquish to the Airport under the proposed 
lease modification.) According to Mr. Franzella, the Budget 
Analyst should consider the land value of the subject 2.61 
acres based on the value of 75 parking spaces, as opposed to 
150 parking spaces. However, if a comparison of 75 parking 
spaces, instead of 150 were made, the relationship between 
the individual parking space valued in this analysis would 
remain identical. Furthermore, we disagree with Mr. 
Franzella. The analysis by the Budget Analyst addresses 
the fair market value of the new space that will now be 
leased to United Airlines that includes 150 parking spaces. 

12. At its meeting of February 7, 2001, the Finance 
Committee also requested the Airport Director to attempt 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

11 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting' 

to renegotiate the proposed lease Modification No. 3 in 
order to require United Airlines to pay to the Airport 
Consumer Price Index adjustments and/or fair market 
value for the subject 2.61 acres. 

13. At the request of the Finance Committee, Mr. Gary 
Franzella of the Airport contacted Ms. Kate Hill, Regional 
Manager of Corporate Real Estate for United Airlines 
concerning possible renegotiations of this lease 
Modification No. 3 to address concerns over adjustments in 
rent to reflect Consumer Price Index adjustments and/or 
fair market value for the subject 2.61 acres. In response to 
the Airport's request, Mr. Peter Nardoza of the Airport 
states in his memorandum of March 21, 2001 to the 
Finance Committee pertaining to this item as well as File 
01-0052, also being considered by the Finance Committee 
on its calendar of April 4, 2001 (Attachment II): "United 
Airlines has responded that it negotiated in good faith with 
the Airport over the original lease agreements and believes 
that the terms agreed to provide value commensurate with 
the complexity, inconvenience, additional costs and Airport 
required access associated with both properties." Mr. 
Nardoza's memorandum provides additional details 
regarding the negotiations between the Airport and United 
Airlines. 

14. At its April 4, 2001 meeting, the Finance Committee 
stated that approval of the subject lease modification would 
be contingent upon United Airlines agreeing to pay to the 
Airport to a CPI adjustment for the second year of a 
separate lease between the Airport and United Airlines for 
Plot 6, also under consideration by the Board of Supervisors 
and discussed in Item No. 2, File 01-0052, of this report to 
the Finance Committee. Ms. Cathy Widener of the Airport 
advises that United has agreed to pay the CPI adjustment. 

Recommendations: 1. Amend the proposed resolution to provide for retroactive 
authorization, in accordance with Comment No. 2 above. 

2. Approve the proposed resolution, as amended, because 
United Airlines has agreed to pay to the Airport, for a 
separate lease between the Airport and United Airlines for 
Plot 6, a CPI adjustment for the second year of the lease, as 
requested by the Finance Committee and as discussed in 
Item No. 2, File 01-0052 of this report, in accordance with 
Comment No. 14 above. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

12 



Attachment I 
Pa ?eT~o£~2 



AIRPORT COMMISSION 

SA ^^^CISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF S AN PR^C^Cq 



INTEROFFICE MEMORANDUM 



TO: 



FROM: 

SUBJECT: LotDDDcvd 



Karvey Rose 
Budget Analyst 

Bob Rhoades (J^ 

Deputy Airport Director, Business 



I>ATE: January 24, 2001 



or: 



opment - MultxModal Transportation Center 

Lot DD consists of a 3 ? t <? „ 

«*L ^ocon^^f^^^ d . 

year20nt«TT -. /T asccur = I,i90space, paved parkin^ W.,„-j.-i P lu ye-s under Airpo 

*« additionS £ a S5parate ^Ezcd cntry/ccit from SouSi £ ? ""= UA 

- * ees ra and from other Anpon destinations. 4 «-^eau e . Shurtle buses 

TJ-i A * 

C'MMTC?,? 11 ^ 8 t0 kn P rove Lot DD as pan of a Multi-Modi! t„ 
n 1 9^ 2 d ;. Vel0pmTOC - Under the -jjfc First PoEcy-' X S^T " Ce ^ 
»v« P^ori^r " COmmittcd <° ^ development o " ^Z^ ^ Con ***ion 

Prtfag, bu^ ^ d v Uld , pr ° Vlde a consolidated transportarion^onnec^on fc ^ ° f «" 
^eVS = hStS ' ^ acc - " the temnnal comol^ K^cTT ^ 
passenae- ter n? , oh J cc '^, such as: 1) reduce vehicular" travel ro , 7 ° Uld ***** a 

SamTran ^n 3 'T^ u se of public transit by proven e ra dirJr ^ Ion S- te = 

Ba^T S S ^ A*" 1 ^ 3 ) "ComagB bicycle conTurina b !^ ectlon b «"«n a new 
AirrSn ' ' Bd ^ *** P«*** Mfa Jth dS2 * K&~Jf te 

Lot DD improvement «„-u ■ . 

p nase I im prov 

1,600 additional .• mcIude: P avm § m unimproved portion of . . 

the inte-s^r P f^ § **« t0 inidaU y bc ^ bv A c lov e ■ ° 3dd a PPr°xunatelv 

contract a ^^ Uga Lot DD ^ «d relccadcn of the parking lot 3 : COns ^c;ioa of the 
currently underway t0 mak= ^ g^ phj^v^ 1 0n:0 Saa e ^-o Avenue. A 



13 



.' f**- • Attachment I 

V :'ril> ". • * ": , i-age 1 of 2' 



Mft-f 



HaivcyHase 
January 24, 2001 
P=Se2 



Phase II improvements include: the extension of the AirTrain System; construction of a second 
parking structure; and the conversion of the employee parking lac and structures into lonp-term 
parking facilities. 

Tic only viable vehicular access to the new parking area being developed is through the United 
Airlines' gecure leasehold area. Without such access, the new surface parking area bein« 
developed in Phase I would be unusable, making less long-term parking available in the future. 
To obtain UA agreement to bisect their leasehold the Airport agreed to increase the UA 
leasehold to accommodate 150 additional parking spaces and to retain the access onto San Bruno 
Avenue for the UA employees. 

Phase I of the project is now underway. The entire MMTC, including phase II imorovements is 
expected to be complete within four to six years. 



14 



OF SAN PRANClSCO 
WILLIE '. BR OWN JH 



LJOfl" v;::0'.: 



viCxiE. i ST 



Page 1 ot i 



San Francisco International Airport 

March 21 ,2001 

P.O.Box SO?" 

San ?rar.ccsco.CA ?-i;s 

The Honorable Mark Leno 7ei o5os:i - 5oco 

Chair, Finance Committee ?ax - 50s: ' 500S 

Board of Supervisors 

City and County of San Francisco 

1 Dr. Carlton B. Goodlett Place 

City Hall, Room 244 

San Francisco, CA 941024689 

Dear Supervisor Leno: 

I'm writing to relay to you the San Francisco International Airport's attempt to bring 
closure to the United MOC Lease Modification 3 and the United Plot 6 Lease 
Modification. As stated in previous Finance Committee meetings, both modifications are 
vital to the completion of the Airport's AirTrain operation - a major public policy and 
public transportation goal of the Airport's Master Plan. 

At the Finance Committee's request, Airport staff contacted United Airlines with a 
request to restructure the leases to address concerns over fair market value rent on the 
lease modification to United Maintenance Operations Center (MOC) and a June 2000 
CPI adjustment on the Plot 6 lease. 

United Airlines has responded that it negotiated in good faith with the Airport over the 
original lease agreements and believes that the terms agreed to provide value 
commensurate with the complexity, inconvenience, additional costs and Airport required 
access associated with both properties. 

While this is not. the response hoped for to move these items forward, I believe it is 
important to point out that United has been a willing partner in the Airport's Master Plan 
expansion from the beginning. When the Airport was finalizing its Master Plan 
expansion, United held substantial land in their Plot 5 and 6 leases which were needed 
to accommodate the expansion of aprons and taxiways to support the New International 
Terminal. In the mid-1990s United agreed to relinquish leased land, as needed, to meet 
Master Plan requirements. This was done at substantial cost and inconvenience to 
United. Additionally Airport staff informed United that another parcel of Plot 6 leased 
land would be necessary to accommodate the AirTrain platform footprint. In the spirit of 
United's original agreement to accommodate Master Plan objectives, United agreed to 
retroactive rent at a higher amount pending the final parcel definition, which was solely 
in the control of the Airport. It should be noted that this proposed lease represents a net 
increase in rent of 51,076,302 annually (a 211% increase), from the current rent of 
$508,353 to $1,584,655.76. 



15 



Pogp J OX £ 

Honorable Mark Leno 
March 21, 2001 
Page 2 



With regard to the Lease Modification 3 to the United MOC, the Airport went to United 
with the request to take back property to which United had absolute rights under its long- 
term lease until 2013. The Airport's ability to re-acquire this parcel of land in Lot DD has 
significant revenue implications in its eventual use as long-term parking. The land at 
issue is anticipated to produce approximately $3 million annually, once the lot reverts to 
long-term parking for the AirTrain system. Furthermore, this parking revenue is part of 
the Airport concessions revenue, 15% of which is paid to the City's General Fund. 

Finally, let me remind the Committee that the Airport, according to the terms of the 
Lease and Use Agreement, must operate on a revenue cost recovery basis. What is not 
collected from leases and concessions is collected from Airline landing fees and terminal 
rentals. 

I urge your approval of the lease modifications. 

Very truly yours, 



Peter Nardoza 
Deputy Airport Director 
Public Affairs 



cc: Hon. Aaron Peskin 

Vice Chair, Finance Committee 
Hon. Matt Gonzalez 

Member, Finance Committee 
Harvey Rose, Budget Analyst 



16 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Item 2 - File 01-0052 

Note: This item was continued by the Finance Committee at its meeting of April 
4, 2001. 



Department: 
Item: 



Lessor: 

Lessee: 

Total Acreage and 
Cost Per Month — 



Payable by United 
Airlines, Inc. to the 
Airport: 



Purpose of Lease: 

Amount Payable by 
United to Airport: 



Airport Commission 

Resolution approving a new lease agreement for Plot 6 
between United Airlines, Inc. (United) and the City and 
County of San Francisco, acting by and through its 
Airport Commission 

City and County of San Francisco 

United Airlines, Inc. 



16.04 acres at a monthly rental rate of $132,054.65 for the 
first and second years of the proposed lease 
(approximately $8,232.83 per acre per month). For the 
first and second years, annual rent would total 
$1,584,655.76 ($98,794 per acre per year). 

United will use the 16.04 acres for an air cargo facility, 
administrative offices and employee parking. 



$1,584,655.76 per year for the first and second year of the 
lease. According to Ms. Dorothy Schimke of the Airport, 
rent in the amount of $1,584,655.76 per year represents 
the fair market value of the subject 16.04 acres on June 1, 
1999, the retroactive effective date of the proposed lease. 
Presently, United pays the Airport $508,353 under permit 
for 19.35 acres (see Comment No. 2). The proposed lease 
provides for annual increases in the rent based on 
increases in the Consumer Price Index (CPI). According to 
the proposed lease, the CPI adjustment would begin on 
June 1, 2001. As stated in Attachment I provided by the 
Airport, there will be no CPI adjustment between June 1, 
1999 and June 1, 2001, thereby resulting in no CPI 
adjustment for the second year of the lease between June 
1, 2000 and June 1, 2001. The lease requires United 
Airlines to pay CPI adjustments for the third, fourth and 
fifth year of the lease. In the sixth year of the proposed 
lease, the annual rental payment to the Airport will be 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Term of Lease: 



Right of Renewal: 

Maintenance and 
Operations: 



Description: 



determined by a City reappraisal of the land to 
reestablish the fair market value amount. Subsequent 
annual increases in the rent will be made based on 
increases in the CPI through the end of the lease. 

Retroactive to June 1, 1999 to June 30, 2011 (12 years 
and one month) 

Lessee has no renewal rights. 



The Lessee, United Airlines, Inc., pays for the costs of all 
maintenance and operations. 

The proposed resolution would authorize a new 12 year 
and one month lease retroactive to June 1, 1999 of 16.04 
acres of a newly configured Plot 6 to accommodate 
Uniteds air cargo facility, some administrative offices and 
employee parking. The 16.04 acres of a newly configured 
Plot 6 would constitute approximately 83 percent of the 
19.35 acres of Plots 5 and 6 covered under a month-to- 
month permit, cancelable on 30-day notice, since the 
expiration of original leases in 1993. According to Ms. 
Schimke, United occupied the 16.04 acres from 1993 until 
June 1, 1999 on a permit basis, instead of under a lease, 
pursuant to the following conditions contained in a 
Memorandum of Understanding negotiated in the early 
1990s between the Airport and United Airlines: 

1) Upon termination of the leases of Plots 5 and 6 
in 1993, the leases would be replaced in the interim 
by month-to-month permits, for the same areas at 
the same land rental rates as were then in effect, 
until the land was required for the Airport's Master 
Plan construction or the functions were 
accommodated elsewhere; 



2) The Airport would offer United a "standard 
lease" for that portion of the site primarily 
comprising Plot 6, for continued accommodation of 
its air cargo facility, offices and related parking; 

3) Rent under the interim permit(s) would remain 
at the same rate as was in effect upon termination 
of the Plots 5 and 6 leases, and would be adjusted 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

18 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

to fair market value at the time the new leases 
were in place. 

The differences between the proposed lease for 16.04 acres 
of a newly configured Plot 6 and the existing month-to- 
month permit for 19.35 acres of Plots 5 and 6 are (1) the 
permit is cancelable upon 30-days notice, (2) the new 
lease adjusts the rents as described in Comment No. 2 
below, (3) 1.43 acres have been added to result in a total 
acreage, of 16.04 acres for Plot 6, which originally totaled 
14.61 acres, and (4) Plot 6 has been slightly reconfigured 
due to the Airport's Master Plan construction program for 
Boarding Area "G" and the Air Train (Airport Light Rail 
System). 

The proposed lease would reflect the City's 
Administrative Code and other City requirements, such 
as provisions requiring compliance with the ban on 
tropical hardwoods and virgin redwood, the MacBride 
Principles related to employment inequity in Northern 
Ireland, the Non-Discrimination in City Contracts and 
Equal Benefits Ordinance, and the Minimum 
Compensation Ordinance. 

Comments: 1. The Airport Commission adopted Resolution No. 00- 

0464 on December 19, 2000, recommending the proposed 
new lease to United retroactive to June 1, 1999. As shown 
in Attachment I, the lease is retroactive to June 1, 1999 
because in June of 1999, the Airport determined that the 
Air Train required adjustments that would encroach upon 
the eastern boundary of the new Plot 6. Finalization of 
the Plot 6 lease was therefore put off until the Air Train 
issues were settled and a legal description of the premises 
could be accurately determined. Ms. Schimke reports that 
because these adjustments were minimal, United agreed 
to establishing an effective date of June 1, 1999 for the 
proposed lease at the then market value rental rate. The 
final configuration of the parcel incorporating the Air 
Train land recapture was not defined and resolved 
between the Airport and United until November of 2000. 

2. According to Ms. Schimke, the proposed lease of 16.04 
acres includes 14.61 acres of the old Plot 6 and 1.43 acres 
of the old Plot 5. As previously noted, the annual rent for 
the first and second year for the 16.04 acres would be 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



$1,584,655.76, a net annual increase of $1,076,302.76, or 
an increase of approximately 211.7 percent, retroactive to 
June 1, 1999, from the permit rent of $508,353 payable by 
United to the Airport for the 19.35 acres of Plots 5 and 6 
covered under permit. The new proposed lease pertaining 
to 16.04 acres would result in a reduction of 3.31 acres 
being leased by the Airport to United. Ms. Schimke 
reports that upon approval of the proposed lease by the 
Board of Supervisors, United would pay retroactively to 
the City $1,793,838, representing the difference in the 
monthly rental income of $89,691.90 for the 20 month 
period from June 1, 1999, the start of the proposed lease, 
through January 31, 2001. The net increase in rent 
payable by United to the Airport for the first two years of 
the lease is calculated as follows: 





Approximate Annual 
Cost per Acre 


Total Acres 


Annual Airport 
Revenues 


Old permit: Plot 5 
Plot 6 


$42,000 
$22,082 


4.071 
15.28 


$170,940 
337,413 


Subtotal for permit 




19.35 


$508,353 


Proposed new lease for 

new Plot 6 (includes a 
majority of the acreage 
of the old Plot 6 and a 
small parcel of the old 
Plot 5) 


$98,794 


16.04 


1,584,655.76 


Net Increase 


$1,076,302.76 



3. The Budget Analyst notes that had the rent amount 
for the second year of the proposed lease between June 1, 
2000 and June 1, 2001 been adjusted for the increase in 
the CPI, then the rent would have increased by 3.77 
percent or approximately $59,742 to an annual rent of 
approximately $1,644,398 instead of the proposed annual 
rent of $1,584,655.76 for the second year of the proposed 
lease. 

4. Since the lease began on June 1, 1999, the proposed 
resolution should be amended to provide for retroactive 
authorization. 



1 Under the proposed lease for the new Plot 6, United will lease 1.43 acres of the 4.07 acres of 
Plot 5 that were under permit. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

20 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

5. At the meeting of February 7, 2001 the Finance 
Committee requested the Airport Director to attempt to 
renegotiate this proposed new lease in order to require 
United Airlines to pay a CPI adjustment to the Airport for 
the second year of this proposed lease between June 1, 
2000 and June 1, 2001. 

6. At the request of the Finance Committee, Mr. Gary 
Franzella of the Airport contacted Ms. Kate Hill, Regional 
Manager of Corporate Real Estate for United Airlines 
concerning a possible renegotiation of this lease to 
address concerns over the lack of a CPI adjustment for the 
second year of the proposed lease between June 1, 2000 
and June 1, 2001. In response to the Airport's request, 
Mr. Peter Nardoza of the Airport states in his 
memorandum of March 21, 2001 to the Finance 
Committee pertaining to this item as well as File 01-0039, 
also being considered by the Finance Committee on its 
calendar of April 4, 2001 (Attachment II): 'United 
Airlines has responded that it negotiated in good faith 
with the Airport over the original lease agreements and 
believes that the terms agreed to provide value 
commensurate with the complexity, inconvenience, 
additional costs and Airport required access associated 
with both properties." Mr. Nardoza's memorandum 
provides additional details regarding the negotiations 
between the Airport and United Airlines. 

7. At its April 4, 2001 meeting, the Finance Committee 
asked the Airport to again request that United Airlines 
pay to the Airport a CPI adjustment for the second year of 
the proposed lease, for the period from June 1, 2000 and 
June 1, 2001. Ms. Cathy Widener of the Airport advises 
that, as a result, United Airlines has agreed to pay a CPI 
adjustment for the second year of the lease, which would 
increase the annual rent paid by United Airlines to the 
Airport by approximately $59,741, or 3.77 percent, from 
$1,584,656 to $1,644,397. Attachment III, provided by the 
Airport is a letter from the Airport to United Airlines 
stating that United Airlines will pay to the Airport the 
additional CPI adjustment. This would result in 
additional annual rental revenues to the Airport of 
$59,741. Ms. Widener advises that since both the Airport 
and United Airlines have agreed to the CPI adjustment, 
retroactive for the period from July 1, 2000 through June 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

30, 2001, the Airport does not need to amend the actual 
lease. 

8. As noted previously, the Airport Commission adopted 
Resolution No. 00-0464 on December 19, 2000, 
recommending the proposed new lease to United 
retroactive to June 1, 1999. According to Mr. Ted Lakey of 
the City Attorney's Office, the Airport does not need to 
return to the Airport Commission for approval of an 
amended lease to include the additional CPI adjustment 
of $59,741 to be paid by United Airlines to the Airport. 

Recommendations: 1. Amend the proposed resolution to provide for 

retroactive authorization, in accordance with Comment 
No. 4 above. 



2. Approve the proposed resolution, as amended, because, 
at the request of the Finance Committee, the Airport 
reports that United Airlines has agreed to pay a CPI 
adjustment for the second year of the lease, which would 
increase the annual rent paid by United to the Airport by 
approximately $59,741, or 3.77 percent, from $1,584,656 
to $1,644,397, as noted in Comment No. 7 above. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

22 



Attachment 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: Harvey Rose 

Budget Analyst 

FROM: BobRhoades |$L 

Deputy Airport Director, Business 

SUBJECT: Plot 6 Lease - United Airlines 



DATE: January 25, 200 1 



As discussed in the Budget Analyst's report, the subject lease comprises one element of a 
complex series of land exchanges required to implement the Airport's Master Plan. The general 
concept, negotiated in the early 1990's, provided for existing permits to remain in place, at then- 
current rents, until the land was required for the Master Plan construction or the functions were 
accommodated elsewhere. It was generally agreed that the Plot 6 lease would not be finaliz ed 
until the parcel reached its final configuration. It was anticipated that the plot would reach its 
final configuration when the Airport recaptured a parking parcel in the area now comprising a 
portion of the new Boarding Area G apron. 

The parking parcel was surrendered by United in June 1999; however, at that time it became 
apparent that the Air Train (Airport light rail system) guideway required adjustments that would 
encroach upon the eastern boundary of Plot 6. The Plot 6 lease could not be absolutely finalized 
until the guideway issues were settled and legal description of the premises could be written, 
based upon formal survey. The issues were finally resolved in late 2000. 

Because the guideway adjustments were minimal, the parties agreed that, once approved by the 
Board of Supervisors, the Plot 6 rent commencement would be retroactive to June 1, 1999. The 
first CPI adjustment will occur in accordance with lease provisions, once the lease is actually in 
place (after Board approval). The Base Index for CPI adjustments is defined as "the most recent 
Consumer Price Index published immediately prior to the Commencement Date," or April 1999. 
The Comparison Index for the first (June 2001) adjustment will be April 2001 , generating a two- 
year value increase. 



23 




OF SAN FFUNCISCO 



16NBY E BEHf, 



VC! "ISiOl* 



Attachment II 
Page 1 ot 1 



San Francisco International Airport 

March 21 ,2001 

P.O. Sox 309" 

San F.-ar.CiSCO. CA ?-i;S 

The Honorable Mark Leno ; ei " ; 3: ;; " 

Chair, Finance Committee m» S3 o.s2!.30o5 

Board of Supervisors 

City and County of San Francisco 

1 Dr. Carlton B. Goodlett Place 

City Hall, Room 244 

San Francisco, CA 94102-4689 

Dear Supervisor Leno: 

— l'm-^ting^on'eiay^to^u"llTe _ SarrFrancisco International Airport's attempt to bring 
closure to the United MOC Lease Modification 3 and the United Plot 6 Lease 
Modification. As stated in previous Finance Committee meetings, both modifications are 
vital to the completion of the Airport's AirTrain operation - a major public policy and 
public transportation goal of the Airport's Master Plan. 

At the Finance Committee's request, Airport staff contacted United Airlines with a 
request to restructure the leases to address concerns over fair market value rent on the 
lease modification to United Maintenance Operations Center (MOC) and a June 2000 
CPI adjustment on the Plot 6 lease. 

United Airlines has responded that it negotiated in good faith with the Airport over the 
original lease agreements and believes that the terms agreed to provide value 
commensurate with the complexity, inconvenience, additional costs and Airport required 
access associated with both properties. 

While this is not. the response hoped for to move these items forward, I believe it is 
important to point out that United has been a willing partner in the Airport's Master Plan 
expansion from the beginning. When the Airport was finalizing its Master Plan 
expansion, United held substantial land in their Plot 5 and 6 leases which were needed 
to accommodate the expansion of aprons and taxiways to support the New International 
Terminal. In the mid-1990s United agreed to relinquish leased land, as needed, to meet 
Master Plan requirements. This was done at substantial cost and inconvenience to 
United. Additionally Airport staff informed United that another parcel of Plot 6 leased 
land would be necessary to accommodate the AirTrain platform footprint. In the spirit of 
United's original agreement to accommodate Master Plan objectives, United agreed to 
retroactive rent at a higher amount pending the final parcel definition, which was solely 
in the control of the Airport. It should be noted that this proposed lease represents a net 
increase in rent of $1,076,302 annually (a 211% increase), from the current rent of 
5508,353 to $1,584,655.76. 

24 



Attachment II 

Honorable Mark Leno 
March 21, 2001 
Page 2 



With regard to the Lease Modification 3 to the United MOC, the Airport went to United 
with the request to take back property to which United had absolute rights under its long- 
term lease until 2013. The Airport's ability to re-acquire this parcel of land in Lot DD has 
significant revenue implications in its eventual use as long-term parking. The land at 
issue is anticipated to produce approximately $3 million annually, once the lot reverts to 
long-term parking for the AirTrain system. Furthermore, this parking revenue is part of 
the Airport concessions revenue, 15% of which is paid to the City's General Fund. 

Finally, let me remind the Committee that the Airport, according to the terms of the 
Lease and Use Agreement, must operate on a revenue cost recovery basis. What is not 
collected from leases and concessions is collected from Airline landing fees and terminal 
rentals. 

I urge your approval of the lease modifications. 

Very truly yours, 



Peter Nardoza 
Deputy Airport Director 
Public Affairs 



Hon. Aaron Peskin 

Vice Chair, Finance Committee 
Hon. Matt Gonzalez 

Member, Finance Committee 
Harvey Rose, Budget Analyst 



25 



tticactiment III 
Page 1 of 2 



San Francisco International Airport 



April 25, 2001 



P-Q. Box 8097 

San Francisco, CA 94123 

Tel 650.821.5000 

Fax 650.321.5005 

wwwjtysfa.com 



AI»fO«T 
COMMISSION 

OTr ANO COUNTY 
Of SAN flUUCISCO 

'.VILCIt I. HXOWN. IK. 
** ATOP 

H?Nnr J.JCRMAN 
PHlSiatNT 



LA*KY .vm?70l A 
V'Ci PltliiOSNT 

wiCMAEi. s.STnuNSur 



LINUA S.C/IAYTON 



/•i»con7 3;«fc7oa 



Mr. Korbey G. Hunt 
Regional Manager 

Corporate Real Estate 
United Airlines, Inc. - SEAOU 
SeaTac International Airport 
Seattle, WA 98188 

Re: Plot 6 Lease 

Dear Korbey: 

This is in reference to our conversation of April 11, 2001, regarding two United 
Airfares items currently pending before the San Francisco Board of Supervisors' 

~ ^f^ l) aP £? Val -° f ** Pl0t 6 1C3SC «* 2) a P? roval of Modification 
wo. 3 to the Maintenance Operations Center (MOC) Lease. 

As you are aware, the Plot 6 lease provides for initial annual rent of SI 584 655 76 to 
be adjusted annually in accordance with CPI increases, with reappraisal every five' 
years_ The lease, once approved, will be effective retroactive to June 1 1999 The 
first CPI adjustment would have been due June 1, 2000 had the lease been effective at 
that time. However, it was originally agreed that the initial rent would remahTin effect 
unul the first adjustment date after the lease is rendered effective J !£2S£ ova! 
Under that scenario, the first adjustment, presumably June 1, 2001 would hive 
covered a 2-year increase in the CPL covering the period April 1999 - April 200 1 . 

n^Sf,? 1 0Ur April l ^ convnsation » United wi » accept the retroactivity of the 
J' R CM ; d ^ P r ™ ded b0 * rf the aforementioned items are moved twk 
the Board without further changes. wrou^ 

Accordingly, annual rent under the Plot 6 lease shall be as follows: 

• for the period June 1, 1999 -May 3 1,2000 SI ,584. 65 5 76 



26 



Page 2 of 2 



Korbcy G. Hum 
United Airiinea, far 
April 25, 2001 
Page 2 



• forthe period June 1, 2000 -May 31, 2001 51,644.397.28 

Comparison Index (April 2000) divided by Base Index (April 1999) 
times Base Rent: 178.7 / 172-2 - 1.0377 

1.377 x $1,584,655.76 = 51,644,39728 

• The adjustment due June 1 , 2001 shall now increase the rent proportionate to the 
one-year increase in the CPL 

This will also confirm that the rental rate for the entire premises under the MOC lease, 
including the premises being added pursuant to Modification No. 3, will be adjusted to 
fair market value in accordance with terms of the lease effective July 1, 2003. 

Thank you for your cooperation in this matter. 

Sincerely, 



Gary Franzella 

Assistant Deputy Airport Director 

Aviation Management 



cc: John L.Martin 
Bob Rhoades 



27 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Item 3 - File 01-0667 

Department: 

Item: 



Lessor: 
Lessee: 

Term of Lease: 



Effective Date of 
Lease Modification: 



Description: 



Airport 

Resolution approving Lease Modification Number 15 for 
Lease No. 82-0126 between United Air Lines, Inc. 
(United), and the City and County of San Francisco, 
acting by the through the Airport Commission. 

City and County of San Francisco 
United Airlines, Inc. 

July 1, 1981 through June 30, 2011, with no option to 
renew. 



June 1, 2001 or upon occupancy of said areas if the Board 
of Supervisors has approved the lease and occupancy 
occurs prior to June 1, 2001. 

Under Lease and Use Agreement No. 82-0126 
(Agreement) dated July 1, 1981, by and between the City 
and County of San Francisco and United Air Lines, Inc., 
as previously amended and approved by the Board of 
Supervisors, United leases from the Airport 
approximately 442,444 square feet of exclusive use space 
in the North Terminal of the San Francisco International 
Airport. The Agreement was last amended and approved 
by the Board of Supervisors in November of 1999 (File 99- 
1852) for the purpose of relocating United's international 
flights to the new International Terminal and the 
completion of United's new automated baggage system. 

According to Ms. Dorothy Schimke of the Airport, over the 
past approximately 8 years, air passenger traffic in the 
North Terminal had increased so significantly it had 
severely strained the existing concession and airline 
operations space. Therefore, in 1998 the Airport 
undertook a program to expand Boarding Area "F' of the 
North Terminal, adding approximately 49,973 square feet 
of airline operations space under the lease with United 
(see Attachment I, provided by the Airport). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

28 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

The purpose of the proposed Lease Modification No. 15 is 
(1) to account for the increase of approximately 49,973 
square feet of exclusive use space in the North Terminal 
used by United Airlines for the expansion of Boarding 
Area "F'; and, (2) the decrease of approximately 462 
square feet of United's exclusive use space from the 
International Terminal, which had been erroneously 
included by the Airport in Modification No. 14, previously 
approved by the Board of Supervisors, as both United's 
exclusive use space and as joint use space (see Comment 
4). Joint use space is defined as airline rental space in a 
facility owned by the Airport which is leased to more than 
one airline for the shared use of all airlines sharing that 
space. Ms. Schimke advises that the subject 

approximately 462 square feet is correctly included in the 
International Terminal as joint use space because the 
space is leased to more than one airline for shared use 
whereas all applicable airlines pay their share of the rent 
for that space. 

Comments: 1. According to Ms. Schimke, the increase of 

approximately 49,973 square feet of exclusive use space in 
the North Terminal for United would result in the 
increase of annual rental to the Airport of $5,013,433, as 
shown in the table below, based on the rental rates in 
effect from February 1, 2001. Ms. Schimke advises that 
this increase represents a 15% increase in United's rent 
for the North Terminal. Ms. Schimke states that rental 
rates are based on the Airport's Rates and Charges for 
Airlines, which are adjusted each July 1 by the Airport 
using the rates and charges methodology prescribed in 
the Lease and Use Agreements, as previously approved by 
the Board of Supervisors, and contained in Attachment II, 
provided by the Airport. Ms. Schimke notes that the 
rental rates in effect from July 1, 2000 were updated on 
February 1, 2001 due to a revenue shortfall primarily 
from the delayed opening of the International Terminal. 

2. According to Ms. Schimke, Modification No. 15 of the 
subject Agreement adds space to United's North Terminal 
leasehold following the completion of the expansion of 
Boarding Area "F' in the following categories: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

29 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Category 
I 

II 



III 

IV 
V 



Description 

Gate Holdroom Space 

New Red Carpet Club and Mezzanine Offices 
located above tbe flight departure level. 

Enclosed Space located below tbe flight 
departure level. 

Miscellaneous Mechanical Space 

Unenclosed Storage 



The approximately 49,973 square feet will be added under 
the United lease in the following five categories of space: 



North Terminal Building 






Annual Rent 










Total 






per Sq Ft by 




Current 


Proposed Sq 


Annual Rent 


Proposed 


Anticipated 


Category 


Category 


Current Sq Ft 


Annual Rent 


Ft Increase 


Increase 


SqFt 


Annual Rent 


1 


$ 154.78 


62,572 


$ 9,684,894 


552 


S 85,439 


63,124 


$ 9,770,333 


II 


116.09 


85,703 


9,949,261 


35,242 


4,091,244 


120,945 


14,040,505 


III 


77.40 


65,613 


5,078,446 


9,484 


734,062 


75,097 


5,812,508 


IV 


38.69 


211,191 


8,170,980 


1,293 


50,026 


212,484 


8,221,006 


V 


15.48 


17,365 


268,810 


3,402 


52,663 


20,767 


321,473 


Total 




442,444 


5 33,152,392 


49,973 


S 5,013,433 


492,417 


538,165,825 



3. Ms. Schimke advises that the building expansion of 
Boarding Area "F\ including the subject 49,973 square 
feet of space for United, was substantially completed in 
November of 2000. United is currently constructing its 
tenant improvements in the North Terminal, which are 
expected to be completed by late Summer of 2001. 
Therefore, United has not yet begun to occupy the subject 
49,973 additional square feet. According to Ms. Schimke, 
the proposed Modification No. 15 will become effective on 
June 1, 2001 or upon United's occupancy of the subject 
additional 49,973 square feet, whichever is earlier, in 
accordance with the latest established rates as of 
February 1, 2001. 

4. Ms. Schimke states that Modification No. 14, 
previously approved by the Board of Supervisors, 
erroneously included approximately 462 square feet of 
exclusive use Category III or Enclosed space in the 
International Terminal. Ms. Schimke advises that the 
inclusion of the subject approximately 462 square feet of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

30 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



exclusive use Category III space for United was an 
administrative error. According to Ms. Schimke the 
approximately 462 square feet of space is properly defined 
as joint use space in the International Terminal and not 
as exclusive use space. Ms. Schimke advises that all 
rental rates are the same whether classified as exclusive 
use space or joint use space. Regarding this 462 square 
feet in the International Terminal which, according to Ms. 
Schimke, United was erroneously charged twice by the 
Airport, as both exclusive use space and joint use space, 
the Airport will still receive, on an annual basis, $35,759 
for the subject approximately 462 square feet under joint 
use space, of which United will pay its proportionate 
share of the rent. The Airport proposes to refund the 
portion of the rent paid twice by United. This refund is 
estimated to be $15,506 for the exclusive use space for the 
period from December 10, 2000, when United took joint 
use occupancy of the subject square footage until approval 
of this legislation by the Board of Supervisors and the 
Mayor. June 1, 2001 was used as the basis for the 
calculation of the $15,506 based on the estimated date of 
final approval of this resolution. If approval of this 
renovation is finalized prior to June 1, 2001 then United 
would be refunded less than $15,506. 

5. Given the reduction in the annual revenues of $35,759 
for the approximately 462 square feet of exclusive use 
Category III space in the International Terminal that 
United was being charged by the Airport and the increase 
in annual revenue to be paid by United for the additional 
49,973 square feet of exclusive use space of $5,013,433 
from the expansion of Boarding Area "F' in the North 
Terminal, the total net annual increase in rent revenues 
payable by United to the Airport is estimated to be 
$4,977,674 ($5,013,433 less $35,759). Ms. Schimke 
advises that the rental rates beginning in July 1, 2001 are 
anticipated to be higher than the rates currently being 
charged. 

6. The proposed resolution does not include language for 
the deletion of approximately 462 square feet exclusive 
use space in the International Terminal which had been 
charged to United. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance Committee - 

May 2, 2001 Finance Committee Meeting 

Recommendations: 1. Amend line fifteen of the proposed resolution to 

account for the deletion of approximately 462 square feet 
of exclusive use space in the International Terminal by 
adding, "and deletion of approximately 462 square feet of 
the International Terminal as exclusive use space," in 
accordance with Comment 6 above. 

2. Approve the proposed resolution, as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

32 



FRCtt SFIA DEPT. OF AVIATION M(LMT. (650)821 4535 (FRI) 4. 20" 01 



Attachment I 



BOARDING AREA F 
HUB AND THUMB 



EXPANSION AREAS 




Attachment II 
Page 1 of 2 



FROM SFIA DEPT. OF AVIATION MGMT. (650)821 4535 (WED) 4. 25' 01 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 
CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: Budget Analyst DATE: April 24, 2001 

FROM: Dorothy Schimke 




Airport Rates and Charges 

Background 

In 1979 a number of airlines filed suit to litigate certain complaints against the City, 
including an allegation that Airport revenues were being unlawfully diverted to the City's 
General Fund. (Federal law prohibits the expenditure of airport revenues for non-airport 
purposes.) In early 1980 the City and the airlines that were parties to the suit entered into 
settlement negotiations that resulted in a detailed Settlement Agreement and an Airline- 
Airport Lease and Use Agreement ("the LU"). Provisions for a substantial restructuring 
of the financial operation of the Airport, including the methodology for calculating 
Airport Rates and Charges, were incorporated into the LU as part of the Settlement 
Agreement. 

Calculation of Rates and Charges 

In general, the airlines are obligated to pay terminal building rental rates and landing fees 
in amounts that, when included with all other Airport revenues, will be sufficient to cover 
all annual Airport costs. Rates are adjusted annually. Terminal rate adjustments are 
based on the average cost per square foot of providing, maintaining and operating the 
tenriinal building areas. 

A simplified outline of the methodology for calculating Airport terminal rents is as 
follows: 

1. Expense Forecasting. Airport forecasts its expenses, including both operating and 
capital expenses, for the upcoming fiscal year. 



34 



F'ROM.SFIA DEPT. OF AVIATION MGMT. (650)821 4535 (WED) 4. 25' 01 



Attachment II 
Page 2 of 2 



Budge Analyst 
April 24, 2001 
Page 2 



2. Revenue Forecasting. Airport forecasts its non-airline terminal revenues for the 
upcoming fiscal year. 

• Concession revenues 

• Rents from non-airline tenants 

• Other revenues (e.g., interest on unexpended capital funds) 

1 . Annual Service Paymeut. 15% of Concession revenues goes to City's general fund 
as compensation for indirect services to the Airport. 

2. Calculation. 

• Non-airline revenues (net of Annual Service Payment) are set off against 
projected expenses. 

« Remainder (expenses that are not covered by norj^airlinejiey-enaes)Js-divided-b-y— 
the total square feet of terminal space rented by airlines to determine average rent 
per square foot, which is then apportioned into five rate categories. 

• The higher the number of square feet rented to airlines, the lower the effective 
rental rate required to recover the terminal costs. 



35 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Item 4 - File 01-0590 

Department: 

Item: 



Description: 



Department of Elections 

Resolution urging the Department of Elections and 
the Budget Analyst to provide pertinent 
information regarding the cost savings and other 
logistical specifics of instant run-off voting to 
support the Board of Supervisors consideration of a 
Charter Amendment for the November 2001 ballot. 

Under Charter Section 13.102, if a candidate for 
the elective offices of the Mayor, Sheriff, District 
Attorney, City Attorney, Treasurer, Assessor- 
Recorder, Public Defender and members of the 
Board of Supervisors does not receive a majority of 
the votes cast in an election for that office or 
District, the two candidates receiving the most 
votes then qualify to have their names placed on 
the ballot for a City -wide or District run-off 
election. In accordance with Charter Section 
13.102, such run-off elections for the offices of 
Mayor, Sheriff, District Attorney, City Attorney, 
Treasurer or a District run-off election for the 
Board of Supervisors are to be held on the second 
Tuesday of the next ensuing December. The run-off 
elections for Assessor-Recorder and Public 
Defender are to be held at the next general 
election. 

The proposed resolution would urge the 
Department of Elections and the Budget Analyst's 
Office to work together to provide information on 
instant run-off voting, including the potential cost 
savings and other logistical specifics, to support the 
Board of Supervisors' consideration of placing a 
Charter Amendment on the November of 2001 
ballot to implement instant run-off elections in San 
Francisco. 



The instant run-off voting system produces a 
majority winner in a single election by simulating a 
series of run-off elections. Under the instant run-off 
voting system, voters would cast a vote for their 
first choice for each office, and also indicate on 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

36 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

their ballot their second and third choices among 
the candidates for each office. If any candidate 
receives a majority of first choices in the initial vote 
count, that candidate is elected. 

However, if no candidate receives a majority of the 
votes in the first round, then the candidate who 
received the fewest first choice votes would be 
eliminated. Each ballot with a first choice vote for 
the eliminated candidate would then be recounted 
to assign those voters' second choice votes to the 
remaining candidate. Again, if no candidate 
receives a majority of the votes, the candidate who 
received the fewest votes is eliminated and the 
votes cast for the second and eventually the third 
ranked candidates are then tabulated from the 
eliminated candidate. This process of eliminating 
candidates and transferring their votes to the next- 
ranked candidates would be repeated until a single 
candidate received a majority of the votes from the 
remaining ballots. This instant run-off election 
process would be conducted during each November 
election, and would eliminate the need for a 
separate December run-off election. 

Comments: 1. Mr. Ara Minasian of the Department of 

Administrative Services advises that the December 
of 1999 Mayoral Run-off Election cost 
approximately $1.48 million. Since the Department 
of Elections has now purchased new more 
expensive voting equipment, Mr. Minasian 
estimates that an average City-wide December run- 
off election in San Francisco would now cost 
approximately $1.5 million to $2.0 million. If the 
proposed resolution is approved, the Budget 
Analyst's Office and the Department of Elections 
would provide more precise cost estimates for run- 
off elections to assist in the preparation of the 
proposed Charter Amendment. 

2. According to Ms. Christiane Hayashi of the 
Department of Elections, the existing Election 
Systems and Software (ESS) equipment is 
technologically capable of handling an instant run- 
off election, where there are up to 17 candidates, 

BOARD OF SUPERVISORS 
BUDGETANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



and one write-in candidate, for a single office. In 
addition, Ms. Hayashi advises that there would be 
no additional computer or equipment costs for the 
City to undertake an instant run-off election 
process. Furthermore, Ms. Hayashi reports that, if 
the City purchases or leayes a different election 
system in the future, such equipment or system is 
likely to have the technological capabilities to 
handle an instant run-off election. 

3. However, Ms. Hayashi advises that there would 
be a need for additional outreach to San Francisco 
voters, through City-wide mailings ($140,000), 
production of public service announcements 
($35,000) and other media outlets, such as 
Citywatch ($5,000) to explain how the new instant 
run-off election process works and to minimize 
voter confusion. These additional outreach efforts 
are estimated to cost a total of approximately 
$180,000. Ms. Hayashi acknowledges that the 
additional costs of these outreach efforts would be 
specifically targeted to the new instant run-off 
election process for the first year or two that the 
system was implemented. After the first year or 
two of implementation of this new system, such 
information would be incorporated into the 
Department of Elections more general voter 
outreach efforts and the additional costs, if any, 
would be minimal, according to Ms. Hayashi. 

Ms. Hayashi also reports that in order to allow 
each voter to indicate their first, second and third 
choices for a variety of candidates, an additional 
page on the ballot may be required, and thus may 
result in additional ballot printing and handling 
costs. The proposed instant run-off election may 
also require some additional minor Department of 
Election staffing costs to tabulate the more 
extensive data from the instant run-off results. 
These costs would be more precisely estimated 
through the joint efforts of the Budget Analyst's 
Office and the Department of Elections, if the 
proposed resolution is approved. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

38 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



4. Overall, the net savings to the City of 
implementing instant run-off elections is estimated 
to be at least $1.0 million per year, based on the 
estimated costs of approximately $1.5 million to 
$2.0 milli on to conduct a separate run-off election, 
less the estimated additional costs of $180,000 for 
outreach efforts plus as yet undetermined amounts 
for additional ballot pages and staffing to conduct 
an instant run-off election. However, the precise 
amount of savings would be determined by the 
Budget Analyst's Office and the Department of 
Elections, if the proposed resolution is approved. 
Ms. Hayashi cautions that such savings would only 
result if all local candidates had instant run-off 
elections. Ms. Hayashi advises that the City would 
not enjoy the full potential cost savings of instant 
run-off voting if the system is implemented only for 
selected local offices, such as the Board of 
Supervisors, since candidates for other local offices 
on the same ballot might still require a run-off 
election, thus negating most of the savings that 
would otherwise be realized. Ms. Hayashi also 
notes that the proposed instant run-off elections 
could not be applicable to any State or Federal 
candidates for offices. 

5. According to Ms. Hayashi, Ireland currently uses 
instant run-off elections to elect their President and 
Australia currently uses instant run-off elections to 
elect their House of Representatives. In November 
of 1998, the voters of Santa Clara County approved 
a Charter Amendment authorizing instant run-off 
voting, when the County's voting equipment is 
technologically capable of handling such a system. 
However, to date, Santa Clara County has not 
conducted instant run-off elections. In FY 2000- 
2001, the City of Oakland approved a Charter 
Amendment to use instant run-off voting in special 
elections to fill vacancies on the City Council. 
Similarly, the voters in the City of San Leandro 
recently adopted a Charter Amendment to switch 
from plurality elections to majority run-off 
elections, with the option of using instant run-off 
elections. However, to date, none of these local 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

39 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

jurisdictions have actually conducted an instant 
run-off election. 

6. Ms. Hayashi advises that the only potential 
difficulty, which she is aware of, with instant run- 
off voting would be the potential for voter 
confusion. Ms. Hayashi advises that such confusion 
could be mitigated with sufficient voter outreach 
and information. Conversely, Ms. Hayashi advises 
that the benefits of an instant run-off election 
include: (a) higher voter turnout which normally 
occurs for the November General Elections than for 
the December Run-off Elections, such that more 
voters would participate in directly electing the 
candidates; (b) immediate final results of the 
election in November, rather than waiting an 
additional month until the December Run-off 
Elections; (c) shortening of the election- cycle, thus 
requiring only one campaign for the candidates, 
and potentially resulting in lower campaign costs; 
and as previously noted, (d) a prehminary estimate 
of Department of Election's cost savings of 
approximately $1 million annually, because San 
Francisco would only have to pay for one election. 

Recommendation: Approval of the proposed resolution is a policy 

matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 
40 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Item 5 - File 00-1783 

Department: 

Item: 



Amount: 
Source of Funds: 

Description: 



Business and Economic Development Department 

Hearing to consider the release of reserved funds in the 
amount of $100,000 for the San Francisco Apartment 
Association's Legal Assistance to Low Income Property 
Owners Program. 

$100,000 

General Fund monies appropriated and reserved by the 
Board of Supervisors in the FY 2000-2001 Business and 
Economic Development Department. 

During the FY 2000-2001 budget review, the Board of 
Supervisors appropriated and reserved $100,000 to the 
Business and Economic Development Department for 
allocation to the San Francisco Apartment Association 
(SFAA), a nonprofit organization which offers multi- 
lingual services to member rental property owners about 
rental property management. 

Under the proposed project, the SFAA would create a new 
SFAA Legal Foundation which would provide legal 
services to qualified low income property owners. The 
$100,000 was placed on reserve pending the submission of 
budget details to the Board of Supervisors. 

This requested $100,000 would be used by the SFAA to 
establish the SFAA Legal Foundation to provide legal 
services to an estimated 145 low income property owners 
for the period from July 1, 2001 through June 30, 2002. 
According to Ms. Jenan New of the SFAA, the SFAA 
Legal Foundation would pay for legal services for San 
Francisco property owners whose income does not exceed 
"very low income" for the San Francisco metropolitan 
area, as defined by the Federal Housing and Urban 
Development (HUD). "Very low income" as defined by 
HUD for a four person household in 2001 is $42,500. Such 
legal services would pertain to cases including (a) 
delinquent rent, and (b) enforcement of various 
agreements and (c) representation before City agencies 
such as the Residential Rent Stabilization and Arbitration 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

41 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Board and the Department of Building Inspection. The 
SFAA Legal Foundation would also use the subject funds 
to develop and provide legal clinics and classes to low 
income property owners. Ms. New reports that a SFAA 
Legal Foundation Board of Directors, to be appointed by 
SFAA's 15-member Board of Directors, would govern the 
SFAA Legal Foundation. A list of SFAA's Board of 
Directors is shown in Attachment I, provided by the 
SFAA. According to Ms. New, the SFAA Legal Foundation 
Board of Directors would consist of seven members 
including one member from each of the following seven 
organizations: the SFAA Board of Directors, the SFAA 
staff, the Coalition for Better Housing, the San Francisco 
Association of Realtors, the Professional Property 
Management Organization, the Chinese Realtors of 



America and the Association of Homeowners. 

Budget: A budget for the period July 1, 2001 through June 30, 

2002 for the proposed SFAA Legal Foundation, is as 
follows: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

42 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Leeal Service 




Legal Services (145 cases @ $450 per case consisting of 870 of paid 
hours of attorney time, at an average time of 6 hours per case at 
$75 per hour and 145 hours of donated time, at one hour per 
case. See Comment No. 1) 


$ 65,250 


Case Materials/Duplication (145 cases @ $25 per case) 


3.625 


Subtotal Legal Services 


$ 68,875 






Promotion 




Development (logo, brochures, letterhead) 


$ 1,350 


Brochure Printing 


2,640 


Letterhead/Envelope Printing 


795 


Bulk Mail Expense 


3,480 


SF Apartment Magazine (advertising) 


775 


Asian Week (advertising) 


950 


New Mission News (advertising) 


800 


SF Independent (advertising) 


1,310 


Press Conference 


1.000 


Subtotal Promotion 


$ 13,100 






Education 




Development of Classes (12 hours at $45 per hour) 


$ 540 


Class Instructor (6 hours @ $75 per hour) 


450 


Classroom Rental 


360 


Class Materials/Books 


375 


Subtotal Education (see Comment No. 4) 


$ 1,725 






Administrative 




Staff (960 hours @ $12.50 per hour) 


$ 12,000 


Foundation Set-up 


1,000 


Fringe Benefits 


1,800 


Contingency (@ 1.5 percent for cost overruns) 


1,500 


Subtotal Administrative 


$ 16,300 


TOTAL PROGRAM COST 


$100,000 



Comments: 



Attachment II, provided by the SFAA, contains additional 
budget details for the summary budget noted on the 
previous page. 

1. Ms. New advises that the SFAA has generated a list of 
attorneys who would provide legal services to eligible 
property owners at an hourly rate of $75, which she 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

43 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



advises is a discount from the attorney's standard hourly 
rate of $150 to $200. These attorneys would donate one 
hour of free consultation to each eligible property owner 
seeking legal services from the SFAA Legal Foundation. 
The SFAA Legal Foundation would use the subject 
General Fund monies to pay the $75 hourly fee to the 
lawyers on behalf of the property owner for each hour of 
legal services beyond the first donated hour, up to a 
maximum of six additional hours. The SFAA Legal 
Foundation would cover the cost of such legal services for 
an estimated 145 cases at a maximum cost of $450 per 
case, for a total annual cost of $65,250. According to Ms. 
New, should a client require more than seven hours of 
legal services (one hour donated plus six hours at $75 per 
hour), (1) the client may apply to the SFAA Legal 
Foundation for additional legal services, or (2) the client 
and the SFAA Legal Foundation would propose a 
litigation budget where both parties would be financially 
responsible for the case. Ms. New states that the SFAA 
would monitor the property owner's case to insure client 
satisfaction and that legal services were being provided in 
an efficient manner. 

2. According to Ms. New, any court awards or 
settlements would reimburse the SFAA Legal Foundation 
for their costs. Such reimbursements would not be subject 
to Board of Supervisors appropriation approval. 

3. According to Ms. New, SFAA would advertise and 
promote the SFAA Legal Foundation to low income 
property owners at a one-time total annual cost of 
$13,100, as detailed in the budget. A promotional 
campaign would include the development of letterhead 
stationary and brochures, as well as a mailing to 12,000 
potential clients. The SFAA Legal Foundation would 
advertise in neighborhood newspapers including Asian 
Week, New Mission News, Independent and the San 
Francisco Apartment Magazine published by Sheridan 
and Associates. The SFAA Legal Foundation would also 
conduct a press conference at City Hall. 

4. Ms. New reports that staff from SFAA's Education 
Program would develop and conduct three two-hour 
classes for the SFAA Legal Foundation. Each class would 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

have 25 low income property owners, at a total cost of 
$1,725. The classes would be held at the University of San 
Francisco. 

5. SFAA staff, at a total cost of $16,300, would provide 
administrative services to the SFAA Legal Foundation, 
according to Ms. New. No City personnel would be 
responsible for providing administrative services for the 
SFAA Legal Foundation. 

6. Ms. New reports that the SFAA Legal Foundation 
would begin operation as of July 1, 2001. Ms. New advises 
that the $100,000 in subject funds would be fully 
expended by June 30, 2002. At such time, the program 
would terminate, if SFAA is unable to secure additional 
funds from private sources or from the City's General 
Fund to continue the program. 

Recommendations: 1. Approval of the requested release of reserved funds, in 

the amount of $100,000, is a policy matter for the Board of 
Supervisors. 

2. If this requested release of $100,000 is approved, 
require the San Francisco Apartment Association to 
report back to the Board of Supervisors by December 31, 
2001 as to the results of the first six months of the new 
program. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

45 



Attachment I 



2001 San Francisco Apartment AssocSation Board of Directors 
Director 
Eric Andresen 

President-Elect & 1st VP West Coast Property Management 



Neveo Mosser 
President 


Property Management Merchandise 




Merrie Turner Lightner 

Past President Ex Officio 


Lightner Property Group 




Marc Wilson 
2ndVP 


Wilson Properties 




Bob Mayer 
Treasurer 


James Laufenberg 

Secretary 


Andrew Long 


Bartholomew Murphy 


Murphy Investments 





Bob Voss 



David Wasserman 



Wasserman-Taxman 



Jim Forbes 



Urban Properties 



Marina Franco 



Nancy Lenvin 



Susan Sangiacomo 



Trinity Investments 



Thomas Garber 



46 



PROGRAM COSTS 



Attachment II 



SECTION A - LEGAL SERVICE 
LEGAL SERVICES 

145 cases @ $450.00 per case 
CASE MATERIALS/DUPLICATION 

145 cases @ $25.00 per case 

SECTION B - PROMOTION 

DEVELOPMENT (LOGO, BROCHURES, LETTERHEAD) 

30 hrs. @ $45.00 hr. 

BROCHURE PRINTING 

12,000 @ $.22 ea. 

LETTERHEAD/ENVELOPE PRINTING 

1,500 @ $.53 ea. 

BULK MAIL EXPENSE 

12,000 @ $.29 ea. 

SF APARTMENT MAGAZINE 

1 Full Page Advertisement (discount rate) 

ASIAN WEEK 

1 Half Page Advertisement 

NEW MISSION NEWS 

1 Half Page Advertisement 

SF INDEPENDENT 

1 Half Page Advertisement 

PRESS CONFERENCE WITH CITY HALL OFFICIALS 

5 hours @ $200.00 hr. 

SECTION C - EDUCATION 
DEVELOPMENT OF CLASSES 

12 hrs. @ $45.00 hr. 

CLASS INSTRUCTOR @ $75 HR. 

Three 2 hourclases @ $150.00 ea. 

CLASSROOM RENTAL 

3 dates @ $120.00 ea. 

CLASS MATERIALS/BOOKS 

75 Material/Books @ $5.00 per student 

SECTION D -ADMINISTRATIVE 
STAFF (HALF-TIME) 

one year @ $1000.00 mo. 
FOUNDATION SET-UP FEE (LEGAL) 
5 hours @$200.00 hr. 
TAXES/BENEFITS 
CONTINGENCY (1.5%) 

TOTAL 



$ 65,250.00 

$ 3,625.00 

$ 1,350.00 

$ 2,640.00 

$ 795.00 

$ 3,480.00 

$ 775.00 

$ 950.00 

$ 800.00 

$ 1,310.00 

$ 1,000.00 

$ 540.00 

$ 450.00 

$ 360.00 

$ 375.00 

$ 12,000.00 

$ 1,000.00 

$ 1,800.00 

$ 1,500.00 

$ 100,000.00 



47 



Memo to Finance Committee 
May 2, 2001 Finance Committee 

Item 6 -File 01-0554 

Note: This item was continued by the Finance Committee at its meeting of April 
25, 2001 



Department: 
Item: 

Description: 



Comment: 



Recommendation: 



Board of Supervisors 

Motion submitting for approval the Fiscal Year 2001-2002 
Budget by the Board of Supervisors. 

The proposed motion would authorize the Clerk of the Board 
to submit the FY 2001-2002 Budget for the Board of 
Supervisors review. In accordance with the proposed motion, 
the FY 2001-2002 Budget for the Board of Supervisors 
includes funding for the new Local Agency Formation 
Commission and the new Office of District Community 
Services. Funding all existing and new divisions, the Board's 
total proposed budget for FY 2001-2002, which has been 
submitted to the Mayor, is $10,072,339, or $991,593 more 
than the $9,080,746 approved in the FY 2000-2001 budget. 

The Budget Analyst will review and make recommendations 
to the Finance Committee in June of 2001, on the Board of 
Supervisors FY 2001-2002 budget, when the Budget 
Analyst's Office reviews all City and County department 
budgets as recommended by the Mayor. 

Approval of the proposed motion is a policy matter for the 
Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

48 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Item 7 - File 01-0105 

Note: This item was continued by the Finance Committee at its meeting of 
February 28, 2001. 



Department: 
Item: 



Description: 



Public Works 

Ordinance amending the Administrative Code by adding 
Section 8.40 to authorize the Department of Public Works, 
or any other department responsible for a dminis tering the 
City and County of San Francisco's Geographic Data 
Services Program, to charge license fees for the use of the 
City's Base Map Geographic Information System ("GIS") 
data and ratifying the establishment of existing and new 
license fees. 

The proposed ordinance amends Chapter 8 of the 
Administrative Code by adding Section 8.40, to: 

• Authorize the Department of Public Works (DPW), or 
any other department responsible for administering 
the City's Geographic Data Services Program, to 
"charge license fees thereunder that are consistent 
with the fair market value of the GIS," and to 
establish reduced rates for non-profit organizations as 
determined by the Director of DPW or the Director of 
any other department responsible for administering 
the City's Geographic Data Services Program. The 
proposed ordinance does not identify the specific fee 
levels. 

• Ratify existing license fees. 

The proposed ordinance provides authority for the 
Director of DPW, or the Director of any other department 
responsible for administering the City's Geographic Data 
Services Program, to establish license fees at fair market 
value for the use of the City's Base Map GIS data and 
that the Director "may establish standard reduced fee 
rates for non-profit organization licensees of the GIS." 

The DPW Office of Geographical Data Services has 
developed and currently maintains the City's Base Map, 
which is formatted for and accessed through GIS 
software. According to Mr. Douglas Legg of the DPW, 
administration of the City's Geographic Data Services 
Program will transfer from DPW to the Department of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

49 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Telecommunications and Information Services (DTIS) 
effective July 1, 2001. The Base Map is comprised of all 
the Assessor's blocks and lots, the City's right of way 
maps, information on the location and dimensions of 
curbs and pavement, utility lines, land use zones, street 
trees, streetlights, and seismic hazard zones. City 
departments use the Base Map GIS data for a variety of 
purposes, including facilitating the street construction 
permitting process, managing the sewer and water main 
system, and assessing earthquake risk. 

According to Mr. Legg, DPW currently charges license 
fees to third parties through license agreements with 
Value Added Resellers (VARs) for the use of the City's 
Base Map GIS data. According to Mr. Legg, third parties 
include architectural and planning consulting firms, 
market research firms, cartographic firms, and 
telecommunications entities. To facilitate the demand by 
third parties for the City's Base Map GIS data, according 
to Mr. Legg, the City Attorney prepared license 
agreements between DPW and VARs. Under contract 
with the City, the VARs are authorized to sub-license the 
City's Base Map GIS data to third parties. According to 
Ms. Tina Olson of DPW, the VAR agreements are not 
subject to Board of Supervisors approval because under 
Charter Section 9.118 the VAR agreements that do not 
have anticipated revenue to the City of $1 million or more 
do not require approval by the Board of Supervisors. The 
VARs re-package the Base Map GIS data, and their 
products may include software and training. 

DPW began charging fees to various City departments 
and the San Francisco Redevelopment Agency in FY 
1996-97 to pay for the development and maintenance of 
the City's Base Map GIS data. Presently, DPW has work 
orders from 12 City departments, the San Francisco 
Redevelopment Agency and 5 DPW bureaus. According to 
Mr. Legg, DPW entered into license agreements with 
three VARs, namely Barclay Mapworks, ValueCad, and 
Hammon, Jensen, Wallen and Associates in October of 
1998 to market and sub-license the City's Base Map GIS 
data to third parties. According to Mr. Legg, these three 
VARs were selected based on their familiarity with the 
City's Base Map GIS data and experience with marketing 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

50 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



GIS data to third parties. Under current agreements with 
the three VARs, which as previously noted are not subject 
to Board of Supervisors approval, DPW receives on a 
quarterly basis (1) 50 percent of the gross revenue 
collected by the three VARs from sub-licensing the City's 
Base Map GIS data to third parties, up to the fair market 
value (listed price) of the data product, which is currently 
$25,000 as established by the Director of DPW, and (2) 10 
percent of gross revenue from products developed from 
the Base Map by the VARs. 

According to Ms. Denise Brady of DTIS, although DTIS 
assumes responsibility for administering the City's 
Geographic Data Services Program effective July 1, 2001, 
the department has not done an analysis of DPWs license 
agreements with VARs and is unable as of the writing of 
this report to comment on the most appropriate 
mechanism to license and/or sub-license the City's Base 
Map GIS data. Ms. Brady reports that it is DTIS's 
intention, after July 1, 2001, to consider how to proceed 
with any agreements with VARs when the license 
agreements between DPW and VARs expire in September 
of 2001. (see Comment No. 2). According to Ms. Brady, 
DTIS will evaluate the structure of the City's Geographic 
Data Services Program and assess the most efficient and 
effective source to marketing the City's GIS Base Map 
data to third parties. 

According to Mr. Legg, if DTIS enters into future license 
agreements with VARs, the department's future share of 
the annual revenue collected by the VARs from sub- 
licensing the City's Base Map GIS data to third parties is 
expected to total $65,000 beginning in FY 2001-02. 
Estimated annual revenues of $65,000 are $58,907 more 
than the estimated revenue anticipated to be realized by 
DPW in FY 2000-01 of $6,093. To date, DPW has collected 
$143,918 from October of 1998 through April 26, 2001. 
File 01-0588, also being considered by the Finance 
Committee on its calendar of May 2, 2001, is a request by 
DPW for the appropriation of $38,676, or approximately 
27 percent, of such revenues collected since October of 
1998 from sub-license fees (see Comment No. 4). 

As shown in the Attachment provided by DPW, the cost of 
maintaining the City's Base Map GIS data is estimated at 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

51 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

$538,676 for FY 2001-02, and would be covered by the 
following estimated funding sources: (1) $400,000 in 
revenue from the budgeted work orders for the City's Base 
Map GIS data provided by the 12 City departments, the 
San Francisco Redevelopment Agency and 5 DPW 
bureaus which participate, (2) $65,000 in revenue from 
sub-licensing through VARs the City's Base Map GIS data 
to third parties, (3) $38,676 in revenue collected since 
October of 1998 from sub-license fees for use by third 
parties of the City's Base Map GIS data, and (4) $35,000 
in consulting fees charged by DPW or, beginning in July 
of 2001, by DTIS to provide technical assistance to other 
City departments. The $38,676 would be appropriated to 
DPW upon Board of Supervisors approval of File 01-0588, 
also being considered by the Finance Committee at its 
May 2, 2001 meeting. 

Comments: 1. As noted in the Attachment provided by DPW, DPW 

currently has work orders from 12 City departments, the 
San Francisco Redevelopment Agency and 5 DPW 
bureaus for the Base Map GIS data. According to DPW, 
the work order revenues from the agencies are estimated 
to total $400,000 annually. According to Ms. Brady, such 
work orders will transfer from DPW to DTIS as of July 1, 
2001, and DTIS will include all work order commitments 
in its FY 2001-2002 budget request. 

2. In September of 2001, when the existing license 
agreements between DPW and VARs expire, any future 
agreements between DTIS and one or more VARs would 
not be subject to approval by the Board of Supervisors, as 
previously noted. 

3. According to Ms. Adine Varah of the City Attorney's 
Office, although Charter Section 2.109 provides that the 
Board of Supervisors must approve by ordinance any rate, 
fee, or similar charge to be imposed by any City 
department, the City Attorney's Office has concluded that 
Section 2.109 does not apply to the GIS Base Map data 
license fees because when negotiating and charging such 
intellectual property license fees, DPW, or any other 
department responsible for administering the City's 
Geographic Data Services Program, is representing the 
City in its proprietary capacity. Such intellectual 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

52 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



property license fees are thus distinguishable from fees 
charged for public facilities or services that are generally 
offered to the community. According to Ms. Varah, 
therefore, approval of this ordinance would ratify the 
existing license fees and authorize the Director of DPW, 
or the Director of any other department responsible for 
administering the City's Geographic Data Services 
Program, to establish new license fees without 
subsequent approval by the Board of Supervisors of the 
specific fees which are established by DPW or any other 
department responsible for administering the City's 
Geographic Data Services Program. 

Currently there is no section in the City's Administrative 
Code establishing the existing DPW license fees to be 
charged for the use of City's Base Map GIS data. Ms. 
Varah states that the proposed ordinance would authorize 
the DPW, or any other department responsible for 
administering the City's Geographic Data Services 
Program, to enter into licensing agreements with VARs 
that would sub-license third party use of this Base Map 
GIS data and charge license fees thereunder for the use of 
the City's Base Map GIS data. In addition, the proposed 
ordinance would ratify all existing fees charged by the 
City under GIS data license agreements since July 1, 
1998, the start date of the fiscal year in which the City 
began licensing the Base Map GIS data. 

4. According to Mr. Legg, since the Finance Committee 
meeting on February 28, 2001, DPW has discovered an 
additional $105,242 of license fee revenues from FY 1998- 
99, bringing the total revenues generated by DPW from 
licensing or sub-licensing the City's Base Map GIS data to 
third parties to $143,918 ($38,676 previously reported by 
DPW plus the additional $105,242 now being reported by 
DPW). According to Mr. Legg, license fee revenues in the 
amount of $105,242 were generated by DPW directly 
licensing the City's Base Map GIS data to a user rather 
than sub-licensing to a user through VARs. Such license 
fee revenues were coded differently in the City's 
accounting system than the sub-license fee revenues. The 
appropriation of such revenues in the amount of $105,242 
will be subject to Board of Supervisors approval during 
the FY 2001-2002 budget process. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

5. As previously noted, administration of the City's 
Geographic Data Services Program will transfer from 
DPW to DTIS effective July 1, 2001. 

Recommendations: 1. In accordance with Comment No. 5, amend the 

proposed ordinance on lines 4, 5 and 6 to read 
"...authorize the Department of Public Works, until July 

1. 2001, and the Department of Telecommunications and 
Information Services, after July 1, 2001, to charge license 
fees for the use of the City's Base Map Geographic..." 

2. In accordance with Comment No. 5, amend the 
proposed ordinance on lines 16, 17 and 18 to read "(a) 
License Fees. The Director of the Department of Public 
Works, until July 1, 2001, or the Director of the 
Department of Telecommunications and Information 
Services, after July 1, 2001, or his or her designee..." 

3. If this proposed ordinance is approved, require the 
Department of Telecommunications and Information 
Services to report back to the Board of Supervisors by 
September 1, 2001 on how the Department of 
Telecommunications and Information Services will set 
license fees for the use of the City's Base Map data. 

4. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

54 



i> „ .City and County of San Francisco 





Willie Lewis Brown, Jr., Mayor 
Edwin M. Lee, Director 



^.ge 1 Of 2 (415) 554^ 830 

FAX (415) 554-7800 
h ttp '7/www . sf d p w . co m 

Department of Public Works 

Finance and Budget Division 

Financial Management and Administration 

City Hall, Room 348 

1 Dr. Carlton B. Goodlett Place 

San Francisco, CA 94102-4645 



Memorandum 



February 22, 2001 

To: Anna Weinstein . 

Board of Supervisor's Budget Analyst's Office 

From: Douglas Legg 

Division of Finance and Budget 

Re: Proposed GIS Fee Ordinance 

This memo is in response to questions you have asked regarding the Department of Public Works 
proposed GIS fee ordinance and appropriation. 

1 . How did we arrive at our annual revenue estimate? 



2. 



The estimate is based on revenues collected by the Counties of Santa Clara and Los 
Angeles and reduced in proportion to San Francisco's relative size. The estimates 
were verified through discussions with potential Value Added Resellers (VARs). 

What is the budget for the Office of Geographic Data Systems? How will DPW 
address a revenue shortfall if proposed fees revenues are not realized as planned? 



Expenses 

Salaries 
Fringe Benefits 
Overhead 
Non Labor 
Ortho Photos 

Total 



$233,727 

51,420 

78,321 

26,532 

148.676 

$538,676 



Revenues 

Work Orders 
License Fees 
Fee Balance 
Consulting 



Total 



$400,000 
65,000 
38,676 
35.000 

$538,676 



The work orders are as follows: 

•IMPROVING THE QUALITY OF LIFE IN SAN FRANCISCO" We are dedicated individuals committed to teamwork, customer 
service and continuous improvement in partnership with the community. 



r\ i_ i_cn_L HI 1C1 I L. 







Page 2 of 2 


Assessor/Recorder 


$20,000 




City Planning 


20,000 




DBI 


46,000 




DPH 


20,000 




DPT 


20,000 




DP W-Bureau of Construction Mgmt. 


35,000 




DPW-Bureau of Architecture 


20,000 




DPW-Bureau of Engineering 


20,000 




DPW-Bur. Street Environmental Srvs. 


20,000 




DPW-Bur. Street & Sewer Repair 


20,000 




DTIS 


20,000 




Fire Department 


20,000 




Mayor's OES 


19,000 




PUC-Bureau of Light, Heat & Power 


20,000 




PUC-Clean Water 


20,000 




Real Estate 


20,000 




SFRA 


20,000 




Treasurer/Tax Coll. 


20.000 




Total 


2400,000 





DPW plans to update the Ortho Photograph layer of the Basemap in the current fiscal 
year. Ortho photographs were last updated in 1993 and the Department and subscriber 
departments are anxious to for this more accurate and timely data. Should revenues not be 
realized in the current fiscal year, expenditure of some non-labor budget items or 
purchase of ortho photographs would be delayed until next fiscal year. 

3. What is a Value Added Reseller (VAR)? Why is DPW "licensing" VARs to sell the 
Basemap data? 

A VAR is essentially a broker who markets data or software to interested buyers. City 
staff are not trained at marketing or managing contracts to sell data, so we use these 
brokers. The City owns the Basemap data, and licenses the VARs to sell it. The VARs in 
rum sub-license the data to interested buyers. Under DPW's license agreements with the 
VARs, DPW is entitled to a percentage of these receipts. Amongst others, the VARs have 
sub-licensed the City's Basemap to e-commerce map companies, and technology 
companies that integrate mapping data with cell phone and pager technology. 

4. How did DPW decide which VARs to license to sell Basemap data? How will DPW 
determine which vendors will be licensed in the future? 

The staff person who worked with the City Attorney to develop the license agreements is 
no longer with the City. The best information that we have indicates that DPW chose the 
current VARs based on their experience with similar municipal organizations and 
datasets, as well as their familiarity with the City of San Francisco's Basemap data. 

For any new agreement or re-licensing of the Basemap GIS data, DPW will aggressively 
seek the best terms possible through competitive negotiations with qualified data 
marketing firms. 



56 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Item 8 - File 01-0588 



Item: 

Amount: 
Source of funds: 



Description: 



Budget: 



Comments: 



Ordinance appropriating $38,676 of Geographic 
Information System License Fee Revenues for the 
development and administration of the Geographic Data 
Services Program of the Department of Public Works. 

$38,676 

The subject $38,676 is approximately 27 percent of the 
$143,918 in revenues collected by the City since October 
of 1998 from sub-license fees for the City's Base Map 
Geographic Information System (GIS) data. Such sub- 
license fees would be ratified under File 01-0105, also 
being considered by the Finance Committee at its May 2, 
2001 meeting, and appropriated upon approval of this 
proposed ordinance by the Board of Supervisors. The 
appropriation of the balance of revenues realized in the 
amount of $105,242 ($143,918 less $38,676) will be 
subject to Board of Supervisors approval during the FY 
2001-2002 budget process. 

The proposed ordinance would appropriate $38,676 for 
the Department of Pub he Works (DPW) to take digital 
aerial photographs of the City. Such digital aerial 
photographs, anticipated to be taken in June of 2001, 
would be used to update the City's Base Map GIS data. 
According to Mr. Jeffrey Johnson of DPW, digital aerial 
photographs were last taken for the City's Base Map GIS 
data in 1993. 

The Attachment, provided by DPW, provides budget 
details for the total proposed project cost of $148,676 
including this request of $38,676. As indicated in the 
Attachment, $136,000 would be expended for an outside 
consultant, Hammon, Jensen, Wallen and Associates, and 
$12,676 will be handled in-house by DPW staff. 

1. The proposed digital aerial photographs would be 
taken by the firm Hammon, Jensen, Wallen and 
Associates. According to Mr. Johnson, Hammon, Jensen, 
Wallen and Associates took the digital aerial photographs 
of the City in 1993. Mr. Johnson reports that DPW is 
currently in the third year of a three year contract with 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

57 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Hammon, Jensen, Wallen and Associates, a consultant 
cited in File 01-0105, to market and sub-license the City's 
Base Map GIS data to third parties. File 01-0105 is also 
being considered by the Finance Committee at its meeting 
of May 2, 2001. Mr. Johnson reports that DPW would 
expand their existing contract with Hammon, Jensen, 
Wallen and Associates to have the firm fly over the City 
and take the digital aerial photographs. Hammon, 
Jensen, Wallen and Associates, with assistance from 
DPW staff, would then connect the digital aerial 
photographs to the City's Base Map GIS data. Mr. 
Johnson states that Hammon, Jensen, Wallen and 
Associates was originally selected through a Request for 
Qualifications process based on their familiarity with the 
City's Base Map GIS data and experience with taking 
digital aerial photographs of the City. 

2. According to Mr. Johnson and as shown in the 
attached budget, the digital aerial photography project is 
estimated to cost $148,676. The proposed appropriation of 
$38,676 would pay approximately 26 percent of the total 
project cost. The remaining $110,000 would be covered by 
revenue from budgeted work orders for the City's Base 
Map GIS data from 12 City departments, the San 
Francisco Redevelopment Agency and 5 DPW bureaus, as 
noted in File 01-0105. Such funds will be requested in the 
proposed FY 2001-2002 budget. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

58 



Attachment 



Cost Estimate 

City of San Francisco 



UPDATE PER ORIGINAL SPECIFICATIONS 


COSTS 


Aerial PhotoaraDhv - B/W (5) 1"=500' 


$10,200 


Survey - HJW will flv utilizinq Airborne GPS and existinq control 


$7,700 


Aerial Trianaulation 


$19,700 


Diqital Terrain Model - HJW will update DTM where chanqes have 
occurred 


$18,440 


Orthophotoqraphv - HJW will scan the photoqraphy @ 2000 DPI. 
Mosaics will performed using manual stitch methods to minimize building 
shear. Imagery will radiometrically balanced. Imagery will be delivered 
in the City's tiling scheme @ quarter-foot and one-foot resolutions. 


$79,960 


Total Consulting Costs (HJW) 


$136,000 


Citv Staff- Qualitv assurance, review of deliverables, distribution, 
additional programming 

Class# Title Hourly Rate(inc Fringe+OH) Hours 
1053 GIS Programmer/Analyst $56.59 224 


$12,676 


Total City Staff Costs 


$12,676 


TOTAL 


$148,676 



59 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Items 9 and 10 - Files 01-0363 and 01-0652 



Department: 



Item: 



Airport 

Administrative Services 
Division (RED) 

File 01-0363 



Department, Real Estate 



Amount: 



Source of Funds: 



Description: 



Resolution authorizing the acquisition of 6 noise 
easements for Schools owned by the South San Francisco 
Unified School District. 

File 01-0652 

Resolution authorizing the conveyance of 5 quitclaim 
nie^U"s^o"prop^rtynDwners^n^h"e _ City^f _ Pacrfica to rescind - 
Grants of Easement (noise easement deeds) previously 
acquired by San Francisco. 

File No. 01-0363 (Acquisition of Noise Easements) 

$12,272,013 

Federal Aviation Administration (FAA) funds of 
$5,436,900, or approximately 44 percent, and Airport 
Revenues of $6,835,113, or approximately 56 percent, to 
be financed from the previously appropriated Airport 
Capital Projects Commercial Paper Fund (see Comment 
No. 5) 

File No. 01-0363 (Acquisition of Noise Easements) 

According to Ms. Sally Osaki of the Airport, California 
law prohibits the operation of an airport if that airport 
has an average noise impact of greater than 65 decibels 
on properties that have "incompatible land uses" with 
regard to this noise, unless a waiver is obtained by that 
airport from the California Department of Transportation. 
"Incompatible land uses" include residences, schools, 
hospitals, convalescent homes, and churches, inside which 
the noise from airport operations averages above 65 
decibels. San Francisco International Airport is currently 
not in full compliance with this State regulation, and has 
operated under a waiver provided by the California 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

60 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Department of Transportation since 1982. In its current 
non-compliant status, the Airport must reapply for a new- 
waiver every three years. 

The Airport, through its Noise Insulation Program and in 
cooperation with neighboring municipalities and San 
Mateo County, has undertaken efforts to reduce noise 
levels in the interior of Incompatible Land Uses near the 
Airport in order to comply with current California law. 
State law requires that the Airport offer noise insulation 
to dwellings, churches, schools, and 24-hour medical care 
facilities within a specified area, referred to as the noise 
contour. To date, as part of the Airport's Noise Insulation 
Program, the Board of Supervisors has previously 
authorized the Airport to acquire Grants of Easement, in 
exchange for insulating various facilities from noise. Such 
easements have been acquired by the Airport from the 
owners of 11,200 dwellings, 12 churches, four schools and 
one skilled nursing facility in the cities of Daly City, 
Pacifica, San Bruno, Millbrae, South San Francisco, and 
in the unincorporated areas of San Mateo County. Of the 
total approximate $155,420,065 cost of insulating these 
structures, the Airport has paid approximately 
$116,440,065, or 74.9 percent, while the FAA has awarded 
grant funds of approximately $38,980,000, or 25.1 percent 
to the local jurisdictions. 

The proposed resolution would authorize the Airport to 
acquire six 20-year noise easements in exchange for the 
Airport providing noise insulation for seven buildings that 
currently experience Airport-related noise levels 
averaging higher than 65 decibels. The subject easements 
are estimated to cost the Airport a maximum of 
$6,835,113, after taking into account the anticipated FAA 
grant funds. However, the Airport will advance up to 
approximately $10,522,013 before the South San 
Francisco Unified School District receives the FAA grant 
funds. When the school district receives the grant funds, 
it will then reimburse the Airport for the advances. Ms. 
Osaki advises that four of the subject buildings are 
eligible for FAA grant funds (see Comment No. 1). 
Further, Ms. Osaki advises that if any of the FAA 
anticipated grant funds are not received by the South San 
Francisco Unified School District, the Airport would be 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

61 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



required to make up the difference. She notes, however, 
that it is highly likely that the FAA will award the grant 
funds. 

Ms. Osaki also advises that acquisition of the subject six 
easements, per the proposed resolution, is anticipated to 
be the last noise easement acquisition that the Airport 
must undertake in order to attempt to come into full 
compliance with California law, with the exceptions noted 
below (see Comment No. 3). 



File No. 01-0652 (Quitclaim Deeds) 

Approval of this proposed resolution would permit five 
owners of single-family residences, from whom the 
Airport had previously acquired noise easements, to 
withdraw from the Noise Insulation Program (i.e. 
"quitclaim" a previously authorized easement). The Noise 
Insulation Program contract permits homeowners to 
withdraw from the program if they choose. The subject 
properties are located in the City of Pacifica. 

Comments: File No. 01-0363 (Acquisition of Noise Easements) 

1. According to Ms. Osaki, six Grants of Easement 
covering seven buildings would be acquired from the 
South San Francisco Unified School District. The subject 
properties consist of four elementary schools, one adult 
continuing education school, and one high school that 
includes two buildings (including a library building and 
an administration building for which one Grant of 
Easement would be acquired). 

Ms Osaki provided the following data on the estimated 
cost of insulating each building and the expected FAA 
reimbursement: 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

62 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Name of Building 


Estimated 
Cost to Insulate 


FAA Grants to 
the South San 

Francisco 

Unified School 

District 


Estimated 
Cost to Airport 


Status of 
FAA Grant 


(1) S. San Francisco 
High School Library 


$900,500 


$720,400 


$180,100 


FAA has committed 
to providing the 
80% 
reimbursement. 


(2) S. San Francisco 
High School 
Administration 
Building 


1,086,599 


869,279 


217,320 


School District has 
submitted 
application for 
grant funds to FAA 
but has not yet 
received a response. 


(3) Ponderosa 
Elementary School 


1,287,000 


1,029,600 


257,400 


FAA has committed 
to providing the 
80% 
reimbursement. 


(4) Baden Adult 
Continuing Education 
School 


3,522,026 


2,817,621 


704,405 


School District has 
submitted 
application for 
grant funds to FAA 
but has not yet 
received a response. 


(5) Juniperro Serra 
Elementary School 1 


2,057,345 


Not Eligible 2 


2,057,345 


Not Eligible 2 


(6) Skyline 
Elementary School 1 


1,217,265 


Not Eligible 2 


1,217,265 


Not Eligible 2 


(7) Buri Buri 
Elementary School 


1,701,278 


Not Eligible 2 


1,701,278 


Not Eligible 2 


Contingency 


500,000 




500,000 




TOTAL 


$12,272,013 


$5,436,900 3 


$6,835,113 





1 Juniperro Serra Elementary School and Skyline Elementary School are located in Daly City but 
are under the jurisdiction of the South San Francisco Unified School District. 

2 Juniperro Serra Elementary School, Skyline Elementary School, and Buri Buri Elementary School 
are located outside of a federally specified area and thus ineligible for FAA grant funds. 

3 The FAA has already committed to paying $1,750,000 of the insulation costs. The Airport 
anticipates that the FAA will pay for an additional $3,686,900, for a total of $5,436,900. 

Ms. Osaki informs that the agreement between the 
Airport Commission and the South San Francisco Unified 
School District stipulates that the Airport will provide 
advances of up to $10,522,013 as follows: 



BOAKD OF SUPERVISORS 
BUDGET ANALYST 
63 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Total Estimated Cost $12,272,013 
Less Grant Funds FAA Has 

Already Committed To Providing (1,750.000) 

TOTAL $10,522,013 

Ms. Osaki explains that the $12,272,013 includes a 
$500,000 contingency that will cover any construction 
costs that turn out to be higher than estimated. She 
notes that $3,686,900 in additional FAA grants is 
expected to be awarded for a total of $5,436,900 in such 
grant funds (the $1,750,000 already awarded plus the 
anticipated $3,686,900). Ms. Osaki adds that the 
estimated maximum cost to the Airport will be $6,835,113 
(consisting of the $12,272,013 anticipated total cost less 
FAA grant funds of $5,436,900). Ms. Osaki advises that 
the FAA will reimburse the South San Francisco Unified 
School District with the anticipated grant funds of 
$5,436,900 as the insulation work progresses. She further 
advises that the agreement between the Airport and the 
South San Francisco Unified School District requires the 
South San Francisco Unified School District to repay the 
Airport within 30 days of receiving the FAA grant funds. 

2. According to Ms. Osaki, the Airport is advancing 
$10,522,013 to the South San Francisco Unified School 
District even though the anticipated cost to the Airport is 
only $6,835,113 because the school district has not yet 
been awarded the remaining anticipated $3,686,900 in 
FAA grant funds ($5,436,900 less $1,750,000 already 
committed). 

3. The proposed resolution states that the "total cost to 
acquire said easements shall not exceed $6.8 million." Ms. 
Osaki has advised the Budget Analyst that it is possible 
that the cost to the Airport could exceed $6.8 million, 
should the FAA not award the anticipated $3,686,900 in 
additional grant funds. Therefore, the Budget Analyst 
recommends deleting the clause that states that the cost 
will not exceed $6.8 million. 

4. As previously noted, Ms. Osaki advises that 
acquisition of the subject six easements, per the proposed 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

64 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



resolution, is anticipated to be the last noise easement 
acquisition that the Airport must undertake in order to 
attempt to come into full compliance with California law, 
with the exceptions noted below. Ms. Osaki further 
advises that after the Airport acquires the six subject 
easements, the Airport will file a notice in August 2001 
with the California Department of Transportation stating 
that it is in compliance with California law. The Airport 
anticipates that the California Department of 
Transportation will then determine that the Airport no 
longer requires a waiver to operate lawfully, according to 
Ms. Osaki. Ms. Osaki notes that the Airport anticipates 
having to continue to monitor and update compliance 
activities for situations such as when new owners 
purchase a property for which the prior owners had 
documented their refusal to insulate their properties. In 
such cases, the Airport would attempt to acquire a noise 
easement from the new owner or would document the new 
owner's refusal to participate. Likewise, Ms. Osaki notes 
that shifts in the boundaries of the State noise contour 
would also require that the Airport attempt to acquire 
easements from owners of the newly included properties. 

5. According to Ms. Osaki, the Airport Capital Projects 
Commercial Paper Fund, previously appropriated by the 
Board of Supervisors for the purpose of insulating 
structures in San Mateo County against Airport noise, 
will have sufficient funds to cover the cost of insulating 
the subject buildings. 

6. Attachment I is a memo from the Real Estate Division 
recommending the approval of the proposed resolution to 
acquire the noise easements. 

File No. 01-0652 (Quitclaim Deeds) 

7. Ms. Osaki advises that the Airport has already paid 
$52,500 to the City of Pacifica for the acquisition of five 
noise easements to insulate the five single-family homes, 
whose owners now wish to withdraw from the Noise 
Insulation Program. Ms Osaki provided the following 
breakdown of the $52,500: 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

65 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Address of Single 
Family Residences 


Amount Airport 

Has Advanced to 

City of Pacifica 


479 Andover Drive 


$3,750 


58 Eastrid^e Circle 


15,000 


83 Gateway Drive 


3,750 


491 Imperial Drive 


15,000 


663 Imperial Drive 


15,000 


TOTAL 


$52,500 



Recommendations: 



According to Ms. Osaki, the $52,500, previously 
authorized by the Board of Supervisors and already paid 
by the Airport to the City of Pacifica to acquire these 
noise easements, will be deducted from future Airport 
payments due to the City of Pacifica for the acquisition of 
other previously authorized noise easements. 

8. Neither Ms. Osaki nor Mr. Steve Hoppe of the Real 
Estate Division could provide the specific reasons why the 
five subject property owners want to withdraw from the 
Noise Insulation Program. Ms. Osaki explains that the 
Airport does not ask property owners why they want to 
withdraw. She further explains that the Noise Insulation 
Program contract between the Airport and property 
owners simply requires that property owners notify the 
City, prior to commencement of the insulation work, if 
they wish to withdraw. Attachment II is a memo from Mr. 
Hoppe citing common reasons why property owners 
choose to withdraw. Similar withdrawals have been 
approved previously by the Board of Supervisors. 

9. Attachment III is a memo from the Real Estate 
Division that recommends that the Board of Supervisors 
approve the subject quitclaim deeds. It notes that the 
Airport Commission has also recommended that such 
quitclaim deeds be approved for the five single-family 
residence owners who wish to withdraw from the Noise 
Insulation Program. 

1. In accordance with Comment No. 3, delete lines 13 and 
14 to eliminate the FURTHER RESOLVED clause which 
states "That the total cost to acquire said easements shall 
not exceed $6.8 million." 

2. Approve the proposed resolution, as amended. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

66 



City and County of San Francisco 




Real Estate Division 
Administrative Services Department 

March 20, 2001 




-■ ATTACHMENT I 
Page 1 of 2 

Airport Commission 
Acquisition of Noise 
Easements C\ 

South San Franciscb'-Unifie'df 
School District \ V 

^fil-er O/V 3<2>$ \ 

\ 






■ ,-y-v 



\ 



Through Ryan Brooks, Director . . 
Administrative Services Departj3*errt> 

Honorable Board of Supervisors^^-- 
City and County of San Francis"co 
City Hall 

1 Dr. Carlton B. Goodlett Place 
San Francisco, CA 94102 



Dear Board Members: 

We recommend approval of the attached proposed Resolution authorizing the 
acquisition of six noise easements for schools owned by the South San Francisco 
Unified School District (the "District"). 

State law prohibits the operation of an airport with a noise impact area based on certain, 
noise standards unless it has eliminated incompatible land uses or obtained a variance 
from the State Department of Transportation. San Francisco International Airport has 
operated under a variance to this regulation and is working to eliminate incompatible 
land uses in the noise impact area. Incompatible land uses include residences, 
schools, hospitals and convalescent homes, and churches unless the interior noise level 
due to aircraft noise is at or below the noise standards. 

A funding agreement approved by the Airport Commission (attached to the Resolution) 
with the District provides up to a total of $10.5 million for advance funding to insulate 
five schools and two associated high school buildings in South San Francisco in return 
for Grants of Easement to permit noise, vibration, and etcetera within the buildings. The 
insulation costs, estimate at $3.7 million, for three of these properties are eligible for 
reimbursement by FAA grant funds. The maximum anticipated cost to the Airport for all 
of the properties is estimated to be $6.8 million. 



*H 






(415)554-9850 
FAX: (415) 552-9216 



Office of the Director of Property 
25 VarvNess Avenue, Suite 400 



San Francisco, 9410 



Honorable Board of Supervisors 
March 20, 2001 
Page 2 



ATTACHMENT I 



Page 2 of 2 



If you have any questions regarding this resolution, please call Steve Hoppe in our 
office at 554.9870. 

Sincerely, 



Enclosure 



cc: John Martin, Airport 
Sally Osaki, Airport 



sh:h:\5450/5450 cover letter.doc 



Anthony-ir-Detucch 
Director of Property 




68 



City and County of San Francisco 




Real Estate Division 
Administrative Services Department 



April 20, 2001 



ATTACHMENT II 
Page 1 of 1 



TO: 



FROM; 



Harvey Rose 
Budget Analyst 



Harry J. Quirm 
Assistant Director of] 




perty 



SUBJECT: Resolution authorizing conveyance of five quitclaim deeds 
to property owners in Pacifica to rescind grants of noise 
easements previously acquired. 



The following is a summary of the most common reasons, based on our understanding that 
property owners have given for wanting to withdraw from the noise insulation program: 

1. Owners want to sell the non-insulated home and not commit a potential buyer 
to the rights that are granted to the Airport under the easement; 

2. Owners want to withdraw from the program because some aspect of the 
planned insulation fails to meet their perceived expectations; and 

3 . Owners do not want to pay for additional structural repairs that are not covered 
under the MOU programs, i.e., dry wood rot damage to be corrected before 
installation of acoustical windows and doors. 



Should you have any questions regarding this matter, please call Steve Hoppe at 554-9870. 



I/sh/NseEsmutRjes«n2 



(41 5) S54-8&S0 
FAX: (415) 552-9216 



Offiaa of the Director of Property 
25 Van Ness Avenue, Suite 40a 



San Francisco, CA 9410: 



69 



)ity and County of San Francisco Real Estate Division 

Administrative Services Department 

March 20, 2001 ATTACHMENT III 

Page 1 of 2 

Airport Commission 
Quitclaim of Noise Easements 
Pacifica 



^il<^o(o G>£Z- 









Through Ryan Brooks, Director >K2?r? — 
Administrative Services Department^ 

Honorable Board of Supervisor/ 
City and County of San Francis 
City Hall 

1 Dr. Carlton B. Goodlett Place 
San Francisco, CA 94102 



Dear Board Members: \ 

We recommend approval of the attached proposed Resolution authorizing the quitclaim 
of noise easements for five residential properties in Pacifica. 

The owners of the five properties listed in Attachment A have decided not to participate 
in the Airport's Master Plan Mitigation Program after having executed deeds granting 
the City easements for aircraft noise. The Airport will be reimbursed by the City of 
Pacifica for funds advanced for noise insulation of these residences. The Airport 
Commission has, by its Resolution No. 01-0067 (attached), recommended the Board of 
Supervisors approve the quitclaim of these five Grants of Easements. 

If you have any questions regarding this resolution, please call Steve Hoppe in our 
office at 554.9870. 

Sincerely, 




Anthony-J^Deliucchi 
Director of Property 



Enclosure 



cc: John Martin, Airport 
Sally Osaki, Airport 

sh:h:\545 1/5451 coverletter.doc 
*1 5) 554-9850 Office of the Director of Property ? 

AX: f4151 552-921 S ?5 Van Ness Avenue. Suite 400 San Francisco. 94102 



ATTACHMENT III 
Page 2 of 2 



Quitclaim List 

Fiscal Year 2000/2001 

Pacifica Addresses Requiring Quitclaim Approval Owner's Last Name: 

479 Andover Drive Harshmann 

58 Eastridge Circle Wong 

S3 Gateway Drive Wong 

491 Imperial Drive Perkins-Manin 

663 Imperial Drive Dowler 



ATTACHMENT A 71 



*j Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Item 11 - File 01-0660 



Department: 
Item: 

Description: 
(1) 



Location: 
Purpose of Lease: 

Lessor: 

No. of Sq. Ft. and 
Cost Per Month: 

Annual Cost: 

Percentage Increase 
Over FY 2000-2001: 

Utilities and 
Janitorial Services: 



Administrative Services Department, Real Estate 

Division (RED) 
Department of Public Health (DPH) 

Resolution authorizing extension, on a month-to-month 
basis, not to exceed twelve months, of nine existing leases 
of real property leased by the Department of Public 
Health. 

Each of the nine proposed DPH leases is summarized 
below: 

298 Monterey Boulevard (entire building) 

The subject property is the site of Mission Team II, 
a DPH Outpatient Mental Health Clinic. DPH has 
leased the subject property since 1974. 

John William Powell and Sylvia Campbell Powell 



Term of Lease: 



Right of Renewal: 



4,025 square feet at $4,265 per month, or 
approximately $1.06 per square foot per month 

$51,180 



None 



The Landlord would pay for janitorial services. The 
RED estimates that gas, electricity, water, and 
scavenger service would cost the City 
approximately $805 per month, or approximately 
$0.20 per square foot per month. 

Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months) 

None 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

72 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Source of Funds: 



68 percent State and Federal, 32 percent General 
Fund 



(2) Location: 



Purpose of Lease: 



Lessor: 



3901-3905 Mission Street (portion of the ground 
floor) 

The subject property is the site of Southeast 
Mission Geriatric Services, a DPH Outpatient 
Mental Health Clinic. DPH has leased the subject 
property since 1983. Part of the clinic is located at 
3911 Mission Street (see Lease No. 3 below). 

Giovacchino and Armando Diodati 



No. of Sq. Ft. and 
Cost Per Month: 



Annual Cost: 

Percentage Increase 
Over FY 2000-2001: 



2,570 square feet at $3,084 per month, or 
approximately $1.20 per square foot per month 

$37,008 



None 



Utilities and 
Janitorial Services: 



Term of Lease: 

Right of Renewal: 
Source of Funds: 



The Landlord would pay for all utilities and 
janitorial services. 

Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months). 

None 

68 percent State and Federal, 32 percent General 
Fund 



(3) Location: 



Purpose of Lease: 



Lessor: 



3911 Mission Street (portion of the ground floor) 

The subject property is the site of Southeast 
Mission Geriatric Services, a DPH Outpatient 
Mental Health Clinic. DPH has leased the subject 
property since 1983. Part of this clinic is located at 
3901-3905 Mission Street (see Lease No. 2 above). 

Giovacchino and Armando Diodati 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

73 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



No. ofSq. Ft. and 
Cost Per Month: 



Annual Cost: 

Percentage Increase 
Over FY 2000-2001: 



1,500 square feet at $1,800 per month, or 
approximately $1.20 per square foot per month 

$21,600 



None 



Utilities and 
Janitorial Services: 



Term of Lease: 

Right of Renewal: 
Source of Funds: 



The Landlord would pay for all utilities and 
janitorial services. 

Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months) 

None 

68 percent State and Federal, 32 percent General 
Fund 



(4) Location: 



Purpose of Lease: 



Lessor: 

No. of Sq. Ft. and 
Cost Per Month: 



Annual Cost: 



Percentage Increase 
Over FY 2000-2001: 



111 Potrero Avenue (ground floor) 

The subject property is the site of Mission 
Integrated Service Center, a DPH Adult Outpatient 
Mental Health Clinic. DPH has leased the subject 
property since 1987. 

Ill Potrero Partnership 



6,000 square feet at $15,000 per month, or $2.50 
per square foot per month, for the first four months. 
Effective November 1, 2001, the monthly rate will 
increase to $17,000 per month, or approximately 
$2.83 per square foot per month. 

$196,000 ($60,000 for four months at $15,000 and 
$136,000 for eight months at $17,000) 



The proposed $15,000 rate for July 1, 2001 through 
October 31, 2001 is the same as the FY 2000-2001 
rate. The proposed $17,000 to be paid from 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

74 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Utilities and 
Janitorial Services: 



Term of Lease: 



November 1, 2001 through June 30, 2002 
represents a 13.3 percent increase over the $15,000 
rate. Over the 12-month period, DPH would pay 
approximately 8.9 percent more than the FY 2000- 
2001 rate ($196,000 compared with the FY 2000- 
2001 amount of $180,000) 



The Landlord would pay for base year (1993) 
janitorial costs. The City would pay for utilities and 
subsequent increases in janitorial costs over the 
base year. The RED estimates that gas, electricity, 
water, scavenger service, and increases in janitorial 
costs over the base year would cost the City 
approximately $1,320 per month, or approximately 
$0.22 per square foot per month. 

Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months) 



Right of Renewal: None 

Source of Funds: 68 percent State and Federal, 32 percent General 

Fund 



(5) Location: 

Purpose of Lease: 

Lessor: 

No. of Sq. Ft. and 
Cost Per Month: 

Annual Cost: 

Percentage Increase 
Over FY 2000-2001: 



10-20 Twenty-Ninth Street (entire building) 

The subject property is the site of the Southeast 
Children's Family Therapy Center, a DPH 
Children's Outpatient Mental Health Clinic. DPH 
has leased the subject property since 1972. 

George, Lois, and Lawrence Maisels 



2,400 square feet at $1,500 per month, or 
approximately $0.63 per square foot per month 



$18,000 



None 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

75 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Utilities and 
Janitorial Services: 



Term of Lease: 



Source of Funds: 



The City would pay for both janitorial services and 
utilities. The RED estimates the monthly cost for 
gas, electricity, water, scavenger, and janitorial 
service would be approximately $720, or 
approximately $0.30 per square foot per month. 

Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months) 



Right of Renewal: None 



68 percent State and Federal, 32 percent General 
Fund 



(6) Location: 

Purpose of Lease: 

Lessor: 



755-61 South Van Ness Avenue (ground floor) 

The subject property is the site of the Mission 
Assertive Community Treatment Program, a DPH 
Adult Outpatient Mental Health Clinic. DPH has 
leased the subject property since 1973. 

AIM TWO 



No. of Sq. Ft. and 
Cost Per Month: 



Annual Cost: 

Percentage Increase 
Over FY 2000-2001: 



Utilities and 
Janitorial Services: 



7,101 square feet at $12,500 per month, or 
approximately $1.76 per square foot per month 

$150,000 



The City currently pays $8,591 per month, or 
approximately $1.21 per square foot per month, for 
a total annual rent of $103,092. The proposed 
annual rent of $150,000 is a 45.5 percent increase 
(see Comment No. 3). 



The City would pay for both janitorial services and 
utilities. The RED estimates the monthly cost for 
gas, electricity, water, and scavenger service would 
be approximately $2,130, or approximately $0.30 
per square foot per month. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Term of Lease: Begins July 1, 2001 on a month-to-month basis (not 

to exceed 12 months) 



Right of Renewal: 
Source of Funds: 



None 

68 percent State and Federal, 32 percent General 
Fund 



(7) Location: 



Purpose of Lease: 



759 South Van Ness Avenue (entire second floor of 
the same building as 755-761 listed above as Lease 
#6) 

The subject property is the site of the Mission 
Family Center, a DPH Children's Outpatient 
Mental Health Clinic. DPH has leased the subject 
property since 1988. 



Lessor: 



AIM TWO 



No. ofSq. Ft. and 
Cost Per Month: 



6,445 square feet at $14,500 per month, 
approximately $2.25 per square foot per month 



Annual Cost: 



$174,000 



Percentage Increase 
Over FY 2000-2001: 



The City currently pays $9,961 per month, or 
approximately $1.55 per square foot per month, for 
a total annual rent of $119,532. The proposed 
annual rent of $174,000 is a 45.6 percent increase 
(see Comment No. 3). 



Utilities and 
Janitorial Services: 



The Landlord would pay for janitorial service. The 
RED estimates the monthly cost for gas, electricity, 
water, and scavenger service would be 
approximately $1,289 per month, or approximately 
$0.20 per square foot per month. 



Term of Lease: 



Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months) 



Right of Renewal: 



None 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

77 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Source of Funds: 



68 percent State and Federal, 32 percent General 
Fund 



(8) Location: 

Purpose of Lease: 

Lessor: 

No. of Sq. Ft. and 
Cost Per Month: 

Annual Cost: 

Percentage Increase 
Over FY 2000-2001: 

Utilities and 
Janitorial Services: 

Term of Lease: 

Right of Renewal: 
Source of Funds: 



1540 Market Street (Suite 250^) 

The subject property is the site of the DPH Wedge 
Program, a tobacco cessation program. DPH has 
leased the subject property since 1996. 

1540 Market Company 



2,121 square feet at $2,297.75, or approximately 
$1.08 per square foot per month 

$27,573 



None 



Landlord would pay for utilities and janitorial 
services. 

Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months) 

None 

Approximately 40 percent Proposition 99 and 
Proposition A tobacco grant funds and 60 percent 
from General Fund 



(9) Location: 

Purpose of Lease: 

Lessor: 



1540 Market Street (Suite 260) 

The subject property is the site of the DPH Tobacco 
Program, a tobacco cessation program. DPH has 
leased the subject property since 1995. 

1540 Market Company 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

78 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



No. of Sq. Ft. and 
Cost Per Month: 



Annual Cost: 

Percentage Increase 
Over FY 2000-2001: 

Utilities and 
Janitorial Services: 



Term of Lease: 

Right of Renewal: 
Source of Funds: 



1,296 square feet at $1,404 per month, or 
approximately $1.08 per square foot per month 

$16,848 



None 



Landlord would be pay for utilities and janitorial 
services. 

Begins July 1, 2001 on a month-to-month basis (not 
to exceed 12 months) 

None 

Approximately 40 percent from Proposition 99 and 
Proposition A tobacco grant funds and 60 percent 
General Fund 



Comments: 



1. Ms. Judy Schutzman of DPH informs that the subject 
nine leases have been leased by the City on a month-to- 
month basis, for the last two to 11 years, as shown below: 

Lease #1- 298 Monterey Blvd.- 7 years 
Lease #2- 3901-3905 Mission Street- 6 years 
Lease #3- 3911 Mission Street- 6 years 
Lease #4- 111 Potrero Avenue- 4 years 
Lease # 5- 10-20 Twenty- Ninth Street- 6 years 
Lease #6- 755-61 South Van Ness- 11 years 
Lease #7- 759 South Van Ness- 2 years 
Leases #8 and #9- 1540 Market Street- 4 years 

According to Ms. Schutzman, such leases have been 
maintained on a month-to-month basis due to anticipated 
consolidations or relocations of the subject DPH clinics. 
DPH is again requesting extension of the leases on a 
month-to-month basis primarily for this reason, as 
explained in Attachment I, provided by the RED. 

2. Mr. Anthony DeLucchi of the RED, advises that the 
rental rates for all of the subject leases are at or below 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

79 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

fair market value and therefore, because of the 
anticipated consolidations and relocations, he 
recommends that the subject properties should continue 
to be leased on a month-to-month basis. He notes that the 
RED has been close to completing negotiations for 
consolidations and relocations to obtain long-term leases 
in the past, but that none of those negotiations have ever 
finalized. Mr. DeLucchi advises that such negotiations 
take significant time to complete and sometimes do not 
materialize. As a result, he explains, such leases have 
remained on a month-to-month lease basis for two to 11 
years. He further explains that the RED anticipates that 
one such consolidation at a facility located at the 2712 
Mission Street will be completed in the near future. 

3. Attachment II, provided by Mr. Julian Sutherland of 
the RED, explains the rationale for the proposed rent 
increases for 755-61 South Van Ness Avenue (Lease #6 
above), 759 South Van Ness Avenue (Lease #7 above), and 
111 Potrero Avenue (Lease #4 above). The Budget Analyst 
notes that the significant rent increases of 45.5 and 45.6 
percent, respectively, for 755-61 South Van Ness and 759 
South Van Ness are described in Attachment II as having 
been "negotiated in the 4 th quarter of 2000, when vacancy 
rates were very low and the demand for office space was 
high. Vacancy and rental rates in the area of the property, 
west of highway 101 have changed little since then." 
Despite this assertion by the Real Estate Division, the 
Budget Analyst believes these two leases may not reflect 
current rental market conditions, as vacancy rates are 
now higher and demand has decreased. 

4. The proposed resolution authorizes the "extension and 
renewal" of the subject leases. Mr. Sutherland advises 
that all of the subject leases are extensions of existing 
leases. Therefore, the Budget Analyst recommends 
deleting the references to "renewal." 

5. Attachment III shows the proposed annual rent 
increases (when applicable) in FY 2001-2002, as well as 
the increases over the four prior fiscal years. 

6. According to Ms. Schutzman, funding for the nine 
proposed lease extensions will be included in the FY 2001- 
2002 DPH budget request. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

80 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Recommendations: 1. In accordance with Comment No. 4, amend the 

proposed resolution to delete the references to "renewal" 
as follows: 

(a) on page 1, line 3 in the title, delete "and 
renewal" so that the phrase reads "Resolution 
authorizing extension, on a month-to-month 
basis..." 

(b) on page 1, line 10, delete "renewal and" so that 
the phrase reads "certain extensions of certain 
existing leases..." 

2. In accordance with Comment No. 3 above, approval of 
the proposed leases for 755-61 South Van Ness (Lease # 6) 
and 759 South Van Ness (Lease # 7) is a policy matter for 
the Board of Supervisors because of the respective 45.5 
and 45.6 percent proposed rent increases. 

3. Approval of all nine of the proposed leases, as amended, 
is a policy matter for the Board of Supervisors because the 
subject leases have been renewed annually, on a month- 
to-month basis, for periods ranging from the last two to 11 
years. However, the Board of Supervisors should consider 
the reasons presented by Mr. DeLucchi in Comment No. 2 
for continuing these leases on a month-to-month basis. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

81 




City and County of San Francisco Real Estate Division 

Administrative Services Department 

April 9, 2001 ATTACHMENT I 

Page 1 of 4 

DEPARTMENT OF PUBLIC HEALTH 

Authorizing Extension and 
Renewal of Leases 

Through Ryan Brooks 
Director, Administrative Services 

Honorable Board of Supervisors 
City and County of San Francisco 
1 Dr. Carlton B. Goodlett Place 
San Francisco, CA 94102 



Dear Board Members: 

We recommend your approval of the attached proposed Resolution authorizing the extension 
and renewal of certain existing leases of real property on behalf of City, as Lessee. 

ITEM 1 . City has leased the entire real property at 298 Monterey Boulevard since 1974 for 
use as an Outpatient Mental Health Clinic. The proposed month-to-month rental rate 
commencing July 1, 2001 is $4,265.00, no increase over the previous year. Based on the 
approximate area of 4,025 square feet, the rental rate represents SI. 06 per square foot per 
month. Janitorial service is included in the rent. City is responsible for gas, electricity, 
water, and scavenger at an estimated monthly cost of $0.20 per square foot. 

ITEM 2 . City has leased portions of the ground floor of the building at 3901-3905 Mission 
Street since 1983 for use as an Outpatient Mental Health Clinic. The proposed month-to- 
month rental rate commencing July 1, 2001 is $3,084.00, the same as the previous year. 
Based on the approximate area of 2,570 square feet, the rental rate represents $1.20 per square 
foot per month. Landlord is responsible for gas, electricity, water, janitorial and scavenger 
service. 

ITEM 3 . City has leased portions of the ground floor of the building at 3911 Mission Street 
since 1984 for use as an Outpatient Mental Health Clinic. The proposed month-to-month 
rental rate commencing July 1, 2001 is $1,800.00, the same as the previous year. Based on 
the approximate area of 1,500 square feet, the rental rate represents $1.20 per square foot per 
month. Landlord is responsible for gas, electricity, water, janitorial and scavenger service. 

ITEM 4 . City has leased the ground floor at 111 Potrero Avenue since 1987 for use as an 
Adult Outpatient Mental Health Clinic. The proposed month-to-month rental rate commencing 
July 1, 2001 is $15,000.00 per month, no increase over the previous rate. Based on the 

(41 5) 554-9850 Office of the Director of Property 

FAX: (415) 552-9216 25 Van Ness Avenue, Suite 400 82 San Francisco, 94102 



t> r-n uv tt , , t t, i ATTACHMENT I 

Department of Public Health Lease Renewals 

Fiscal Year 2001/2002 Page 2 of 4 

approximate area of 6,000 square feet, the rental rate represents $2.50 per square foot per 
month. Effective November 1, 2001, the rate will increase to $17,000.00 per month. Owner 
pays for base year janitorial service. City is responsible for maintenance, gas, electricity, 
water, scavenger and increases in janitorial costs over the base year service, at an estimated 
monthly cost of $0.22 per square foot. 

At the request of the Department of Public Health, the Real Estate Division has entered an 
agreement in principle for a long term lease of the building at 2712 Mission Street. 
Completion of that transaction would allow the consolidation of the clinics now located at 
3901-3911 Mission Street (Items 2 & 3), 111 Potrero Avenue (Item 4), and 755-61 South Van 
Ness Avenue (Item 6) into a single location. Separate legislation will be submitted for 
authority to enter into a lease at 2712 Mission Street if the lease terms and leasehold 
improvements to be constructed by landlord at its cost are finalized. It is currently projected 
that the City could occupy 2712 Mission Street in the fourth quarter of calendar year 2001, 
depending on Planning Department approval, legislative approval, the time required to 
complete interior design, and the construction schedule for leasehold improvements. 

ITEM 5 . City has leased all or part of the building at 10-20 Twenty-ninth Street since 
approximately 1972 for use as a Children's Outpatient Mental Health Clinic. The proposed 
month-to-month rental rate commencing July 1, 2001 is $1,500.00, the same as the previous 
year. Based on the approximate area of 2,400 square feet, the rental rate represents $0.62 per 
square foot per month. City is responsible for gas, electricity, water, scavenger, and janitorial 
service at an estimated monthly cost of $0.30 per square foot. 

In June 2000, the City leased a building at 4527 Mission Street for the Department of Public 
Health (DPH) so that it could better serve a portion (approximately half) of the clients that 
were previously seen at the clinic at 10-20 29th Street. At the request of DPH, the Real Estate 
Division has entered negotiations to lease a location at 100 Blanken Way to relocate the staff 
that continue to provide services at 10-20 Twenty-ninth Street. Separate legislation will be 
submitted seeking authority to enter into a lease at 100 Blanken Way. It is anticipated that the 
improvements to the premises at the new location will be completed by August of 2001, 
depending on the timing of the City's legislative process and the landlord's construction 
schedule, If the Blanken Way transaction is completed, the Twenty-ninth Street agreement 
will be terminated. 

ITEM 6 . City has leased the entire ground floor at 755-61 South Van Ness Avenue since 
1973 for use as an Adult Mental Health Outpatient Clinic. The proposed month-to-month 
rental rate commencing July 1, 2001 is $12,500.00, a 46% increase over the previous year. 
The percentage increase is a reflection of both the escalation in the rental market since the last 
renewal, and the degree to which the prior rental rate was below market. Based on the 
approximate area of 7,101 square feet, the rental rate represents $1.76 per square foot per 
month. Janitorial service is included in the rent. City is responsible for gas, electricity, 
water, scavenger, and janitorial service at an estimated monthly cost of $0.30 per square foot. 



83 



Department of Public Health Lease Renewals ATTACHMENT I 

Fiscal Year 200 1 /2002 ~ I TT~ 

Page 3 of 4 

ITEM 7 . City has leased the entire second floor at 759 South Van Ness Avenue since 1988 
for use as a Children's Outpatient Mental Health Clinic. The proposed month-to-month rental 
rate commencing July 1, 2001 is $14,500.00, a 46% increase over the previous year. The 
percentage increase is a reflection of both the escalation in the rental market since the last 
renewal, and the degree to which the prior rental rate was below market. Based on the 
approximate area of 6,445 square feet, the rental rate represents S2.25 per square foot per 
month. City is responsible for gas, electricity, water, and scavenger service at an estimated 
monthly cost of $0.20 per square foot. 

The landlord at 755-61 and 765 South Van Ness Avenue has agreed to complete, at its cost, a 
major renovation of the ground floor premises for City, subject to completion of plans and 
specifications, construction cost bids, and negotiation of the final terms of a long term lease. 
The Real Estate Division is working closely with the landlord to complete the design process 
so that the plans can be bid for construction. This location provides an alternative to 2712' 
Mission Street to accommodate a consolidation of the clinic that currently occupies the ground 
floor (Item 6) with the clinic now located at 111 Potrero Avenue (Item 4). The new long term 
lease would also require minor improvements to the second floor of the building (Item 7), and 
consolidate the separate leases for the first and second floors into a single agreement. It is 
unlikely that the negotiations, construction and consolidation can be completed until near the 
end of calendar year 2001. If the 2712 Mission Street transaction is completed, the 
Department of Public Health has identified other units that could use 755-61 South Van Ness 
Avenue. It is anticipated that separate legislation for both transactions will be proposed at a 
later date. 

In April 2001, the City leased a portion of the building at 30 Van Ness Avenue (suite 2300) 
for the Department of Public Health (Resolution No. 54-01). The DPH Wedge and DPH 
Tobacco Programs, currently located at 1540 Market Street (Items 8 & 9 below), will occupy 
the 30 Van Ness Avenue premises. It is anticipated that the construction of tenant 
improvements at the new location will be complete in mid-July 2001. When the Wedge and 
Tobacco units move, it is expected that the agreements at 1540 Market Street will be 
terminated. 

ITEM 8 . City has leased Suite 250 at 1540 Market Street since approximately 1996 for use of 
the DPH Wedge Program. The proposed month-to-month rental rate commencing July 1, 
2001 is $2,297.75, the same as the previous rate. Based on the approximate area of 2,121 
square feet, the rental rate represents $1.08 per square foot per month. Landlord is 
responsible for gas, electricity, water, janitorial and scavenger service. 



84 



Department of Public Health Lease Renewals 

Fiscal Year 2001/2002 attachment i 

Page 4 of 4 

ITEM 9 . City has leased Suite 260 at 1540 Market Street since approximately 1995 for use of 
the DPH Tobacco Program. The proposed month-to-month rental rate commencing July 1, 
2001 is $1,404.00, the same as the previous rate. Based on the approximate area of 1,296 
square feet, the rental rate represents $1.08 per square foot per month. Landlord is 
responsible for gas, electricity, water, janitorial and scavenger service. 




Attachment 

cc: Mitch Katz, M.D. 
Monique Zmuda 
Larry Doyle 
Judy Schutzman 



85 



City and County of San Francisco 




Real Estate Division 
Administrative Services Department 



MEMORANDUM 



ATTACHMENT II 



Page 1 of 2 



April 26, 2001 



TO: 



Harvey Rose 
Budget Analyst 



FROM: Julian Sutherland W m 

Senior Administrative Analyst 
554-9866 



SUBJECT: Public Health Lease Renewals 
Fiscal Year 2001/2002 



The following explanations are provided in response to your questions regarding various Public 
Health lease renewals. 

Ill Potrero Avenue (Item #4) 

The rent is unchanged at $15,000.00 per month. The landlord's expectation is that the extension 
is intended to be for a short term. The increase in rent to $17,000 on November 1 2001 is the 
landlord's incentive to the City to move out as planned in the relocation to 2712 Mission Street. 
At $15,000 per month the $2.50 per square foot rate negotiated with the landlord is market rate 
rent. 

755-61 South Van Ness Avenue (Item #6) 

The increase in rent from $8,591.00 to $12,500 per month represents an increase of 
approximately 46% over the prior year. This lease was negotiated in the 4* quarter of 2000 when 
vacancy rates were very low and the demand for office space was high. Vacancy and rental rates 
in the area of the property, west of highway 101 have changed little since then. The City is in the 
process of negotiating a long term, market rate lease for the entire building, which would include 
a major renovation of the premises. 

759 South Van Ness Avenue (Item #7) 

The increase in rent from $9,961.00 to $14,500 per month represents an increase of 
approximately 46% over the prior year. As noted above, the market had changed dramatically. 
The market rate rent negotiated with the landlord for fiscal year 2001/2002 has matched the 
change in the market and we don't believe the current market to be significantly different. As 



(415)554-9850 
FAX: (415) 552-9216 



Office of the Director of Property 
25 Van Ness Avenue, Suite 400 

86 



San Francisco, 94102 



ATTACHMENT II 



Page 2 of 2 



noted, the intent is to negotiate a long term, market rate lease for the entire building, which would 
include a major renovation of the premises. 

At the request of the Department of Public Health, the Real Estate Division is currently 
negotiating the terms of a new long-term lease for the entire building at 755-761 and 759 South 
Van Ness Avenue. The clinic currently located at 1 1 1 Potrero Avenue would be consolidated at 
2712 Mission Street, with that now at 755-61 South Van Ness (ground floor), and the clinic 
currently located at 759 South Van Ness (second floor) would remain at that location. In the 
mean time, we believe that it is prudent to maintain month-to-raonth agreements in order to 
maximize the City's ability to react in the current market. 

All of the rents proposed for the 2001/2002 fiscal year are at or below fair market value. If there 
are other questions regarding the proposed renewals, please call me at 554-9866. 



87 



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Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Item 12 - File 01-0654 

Departments: Public Utilities Commission (PUC) 

Item: Resolution authorizing a 10-year lease of Public Utilities 

Commission land between the City and County of San 
Francisco and S.J. Amoroso Properties, in Santa Clara 
County. 

Location: A portion of Parcel 244, Bay Division Pipelines 3 and 4 

right of way, in the City of Palo Alto, Santa Clara County 

Purpose of Lease: The subject property would be utilized by S.J. Amoroso 

Properties as a paved parking lot for overflow tenant 
parking for an adjacent apartment complex owned by S.J. 
Amoroso Properties. 

Lessor: City and County of San Francisco through the Public 

Utilities Commission (PUC) 

Lessee: S.J. Amoroso Properties 

No. of Square Feet and 

Cost Per Month: Approximately 21,344 square feet, of which 5,600 square 

feet (approximately 26 percent of the total square footage) 
would be charged at a rental rate of $1,008 per month 
($12,096 annually), which is approximately $0.18 per 
square foot per month or approximately $2.16 per square 
foot annually. Comment No. 1 explains why only 26 
percent of the subject property is chargeable. 

Annual rent Payable by 

S.J. Amoroso 

to the City: $12,096 annually. This annual rent would be adjusted 12 

months after the commencement date of the lease, and 
then readjusted every 12 months thereafter, by the 
annual percentage increase in the Consumer Price Index 
(CPI). In addition to the annual CPI rent adjustment, the 
base rent would be adjusted to equal the prevailing fair 
market rental rate of such property after five years. The 
fair market value adjustment after five years would be 
determined by the PUC's Bureau of Commercial Land 
Management, using a market comparison approach, in 
consultation with the Department of Real Estate. The 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

89 



Memo to Finance Co mmit tee 

May 2, 2001 Finance Committee Meeting 



Term of Lease: 

Right of Renewal: 
Description: 



Comments: 



adjustment would take into account: (a) land values in the 
general vicinity of Palo Alto, (b) the location and size of 
the premises covered by leases of comparable space, and 
(c) the duration of the comparable leases. S.J. Amoroso 
Properties would have the opportunity to dispute the 
prevailing market rate determined by the PUC, as 
provided for in the proposed lease. If an agreement 
between the PUC and S.J. Amoroso Properties on the 
prevailing market rate cannot be reached, then 
unresolved disputes between the two parties would be 
resolved by hiring an independent appraiser. The annual 
base rent on or after the adjustment date cannot be less 
than the annual base rent in effect immediately prior to 
the adjustment date. 

The proposed lease would commence upon approval by the 
Board of Supervisors and would expire 10 years thereafter 
(approximately June of 2011). 

None. 

The subject resolution would authorize a 10-year lease of 
approximately 21,344 square feet of City-owned land 
located in the City of Palo Alto, Santa Clara County, 
which is under the jurisdiction of the PUC, to S.J. 
Amoroso Properties. The Bay Division Pipelines 3 and 4, 
which run under this land, transport and distribute water 
for the San Francisco Water Department. Under the 
proposed lease, the PUC would retain all rights to 
operate, maintain, repair and/or reconstruct those 
pipelines. 

Of the 21,344 square feet of PUC land which would be 
leased to S.J. Amoroso Properties, 5,600 square feet would 
be used for a paved parking lot (see Comment No. 1). The 
remaining 15,744 square feet of PUC land would be used 
for (1) landscaping by S.J. Amoroso Properties, and (2) 
existing PUC facilities for maintenance of the pipeline. 
The paved parking lot would be used for overflow tenant 
parking for an adjacent apartment complex owned by S.J. 
Amoroso Properties. 

1. According to Ms. Cindy Lee of the PUC, when the PUC 
originally purchased its pipeline property from various 

BOARD OF SUPERVISORS 
BUDGE^ ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



landowners, the sellers reserved rights within their deeds 
to cross over and farm on their former properties. 
Therefore, the resulting grant deeds contain provisions 
which reserve cross-over and agricultural rights for the 
owners of the adjacent properties. As the current owner 
of an adjacent property, S.J. Amoroso Properties retains 
those cross-over and agricultural rights. In light of such 
grant deeds, the PUC has a policy to not charge the 
owners of adjacent properties for any uses of a cross-over 
purpose (such as a driveway) or an agricultural purpose, 
including landscaping. Mr. Charles Sullivan of the City 
Attorney's Office confirmed that the PUC's policy is 
consistent with the language of the existing grant deeds. 
Of the subject parcel's approximately 21,344 square feet, 
approximately 15,744 square feet (approximately 74 
percent) would be utilized for landscaping or driveway 
purposes, or is currently occupied by a PUC pipeline 
facility. In keeping with the PUC's policy, such uses would 
not be chargeable. The remaining 5,600 square feet 
(approximately 26 percent) would be utilized as a paved 
parking lot and would be chargeable as this use is not 
related to either agricultural or cross-over rights. 

2. The 15,744 square feet which are not chargeable (the 
total 21,344 square foot subject property less the 5,600 
square feet which are considered chargeable) result in a 
rental reduction of approximately $34,007 annually at the 
rental rate of approximately $2.16 per square foot 
annually. However, as previously noted, the PUC has a 
policy not to charge for property which is used for cross- 
over or agricultural purposes, or for land that is occupied 
by a PUC facility. The PUC's policy, according to Mr. 
Sullivan, is consistent with the language of the grant 
deeds that apply to such properties. 

3. Ms. Lee states that a valuation of current market 
rental rates in the subject property was performed by the 
PUC's Bureau of Commercial Land Management and that 
the proposed lease rate of $0.18 per square foot per month 
was determined to be the fair market value. According to 
Ms. Lee, the fair market rental rate valuation was based 
on (a) an analysis of recent sales of comparable properties 
in the Palo Alto area, (b) comparable PUC leases in the 
South Bay, and (c) property sales information derived 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

91 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



from the real estate information service, Metroscan. Ms. 
Lee states that Metroscan is a real estate information 
service used by realtors and real estate appraisers which 
provides a monthly update of property sales and rental 
rates by geographical area. 

4. According to Ms. Lee, the subject property is situated 
between the proposed Lessee's property, which includes 
an apartment complex, and a row of redwood trees and 
residential yards, and has no use to any other adjacent 
property owner. As the subject property is only 80 feet 
wide and cannot have structures built on it, it is suitable 
only for vehicle parking lots, gardens and recreational 
spaces for adjacent businesses. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 
92 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Item 13 - File 01-0669 

Department: Administrative Services, Real Estate Division 

Mayor's Office of Public Finance 

Item: Resolution authorizing (a) the execution and delivery of 

the Agreement of Purchase and Sale for Real Estate (the 
"Original Agreement"), as amended by a First 
Amendment to Agreement of Purchase and Sale for Real 
Estate (the "First Amendment" and together with 
Original Agreement, the "Purchase Agreement"), between 
the City and County of San Francisco (the "City"), as 
buyer, and the Herbst Foundation, Inc. (the "Seller"), as 
seller (including certain indemnities contained therein), 
for the purchase by the City of real property and 
improvements thereon consisting of an existing five-story 
office building located at 30 Van Ness Avenue, San 
Francisco (collectively, the "Property"); (b) approving the 
forms of one office lease between the City, as landlord, 
and the Seller, as tenant (the "Herbst Lease") and another 
office lease between the City, as landlord, and Merriman 
Brothers, as tenant (the "Merriman Lease", and 
collectively, the "Office Leases"); (c) approving the 
execution and delivery of Certificates of Participation 
(COPs) to finance the acquisition of and improvements to 
the Property; (d) approving the form of the Project Lease 
between the City and a Trustee (including certain 
indemnities contained therein); (e) authorizing the 
selection of a Trustee; (f) approving the form of the Trust 
Agreement between the City and a Trustee (including 
certain indemnities contained therein); (g) approving the 
form of the Official Notice of Sale and Notice of Intention 
to Sell for the Series 2001A Certificates of Participation 
and Taxable Series 2001 B Certificates of Participation 
(as defined herein); (h) approving the form of the Official 
Statement in preliminary and final form; (i) approving the 
form of a Continuing Disclosure Certificate; (j) 
authorizing the filing of a validation action validating the 
execution and delivery of the Certificates of Participation 
(COPs); (k) authorizing the reimbursement of certain 
expenditures; (1) authorizing the payment of costs of 
issuance of the Certificates of Participation; (m) adopting 
findings under the Environmental Quality Act and 
findings pursuant to the City Planning Code Section 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

93 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



101.1; and (n) ratifying previous actions taken 
connection therewith. 



Description: 



Approval of the proposed resolution would authorize: 

(a) The purchase by the City in an amount not to exceed 
$32,600,000 of an existing five-story building at 30 
Van Ness Avenue, consisting of a total of 180,939 
square feet, to be used for City office space and to 
enter into lease agreements with two proposed 
tenants, the Herbst Foundation and the Merrhnan 
Brothers, for use of 1,587 square feet of the subject 
property as office space; and 

(b) The sale of Certificates of Participation to finance the 
purchase of the subject property. 



Location: 

Seller: 

Buyer: 

Purchase Price: 
Source of Funds: 



Purchase Agreement 

30 Van Ness Avenue, a five-story office building, 
consisting of 38,123 square feet of land and 180,939 
square feet of building space. 



California nonprofit 



Herbst Foundation, Inc., a 
corporation 

City and County of San Francisco 

$32,600,000 (see Comment 1) 



Certificates of Participation in an amount not to exceed 
$37,830,000 in aggregate principal amount, including 
$35,950,000 Tax-Exempt Series 2001A and $1,880,000 
Taxable Series 200 IB (see below). 

The Real Estate Division proposes to purchase the subject 
property for use as office space for City departments. The 
subject property consists of a total of 180,939 square feet 
of building space, of which 8 City departments currently 
occupy 164,161 square feet of office space, 4 commercial 
tenants occupy 15,191 square feet of office and retail 
space, and two proposed tenants, Herbst Foundation and 
Merriman Brothers, would occupy 1,587 square feet of 
office space. Currently, the 8 City departments occupying 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



164,161 square feet of office space pay annual rent of 
$3,729,225, equal to an average rent of approximately 
$22.72 per square foot per year or approximately $1.89 
per square foot monthly. Attachment I contains details of 
the existing leases, including square feet and rental costs 
of each tenant. In addition, the City would assume 
responsibility at the close of escrow for the obligations of 
the landlord at 30 Van Ness Avenue, including operating 
and maintaining the subject property and enforcing the 
terms of the lease agreements, for 4 commercial tenants 
occupying 15,191 square feet for total annual rental 
payments of $396,177, for an average rent of 
approximately $26.08 per square foot per year or $2.17 
per square foot per month (see Attachment I). 



Lessor: 

Lessee: 

Purpose of Lease: 

No. of Square Feet:: 

Base Monthly Rent: 

Base Annual Rent: 
Rent Adjustment: 



Lease Agreements 

Upon close of escrow, the City would enter into lease 
agreements with the current property owner, Herbst 
Foundation, for the Herbst Foundation to lease from the 
City 1,158 square feet of office space, and one new tenant, 
Merriman Brothers, to lease from the City 429 square feet 
of office space at 30 Van Ness Avenue after the purchase 
of the building by the City. 

The following details pertain to the proposed lease with 
Herbst Foundation. 

City and County of San Francisco 

Herbst Foundation 

Rental of office space for non-profit charitable activities 

1,158 square feet of office space, designated as Suite 3600 

Approximately $2,917 per square foot or $3,377.50 per 
month 

$35 per square foot or $40,530 per year 

Annual adjustment on July 1 of each year of the term of 
the lease, based on the Consumer Price Index (CPI), but 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

95 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Term of Lease: 



no less than 3 percent annually and no more than 7 
percent annually (see Comment 11). 

October 1, 2001 through September 30, 2004, a three-year 
period 



Option to Terminate: Tenant has the right to terminate the Lease upon 120 

days prior written notice 

Utilities and Services: Provided by the City 



Other Major Lease 
Provisions: 



The proposed lease contains other major provisions, 
including (a) that the tenant shall have the right to rent 
up to two parking spaces at the then fair market value of 
the spaces to be determined by the City; and (b) that the 
City shall have the right to relocate the tenant one time to 
other similar space within the building at any time during 
the 3-year term of the lease. 



Lessor: 
Lessee: 

Purpose of Lease: 
No. of Square Feet:: 
Base Monthly Rent- 
Base Annual Rent: 
Rent Adjustment: 



The following details pertain to the proposed lease with 
the Merriman Brothers. 

City and County of San Francisco 

Merriman Brothers, individuals jointly and severally 
liable as tenants 

Rental of office space 

429 square feet of office space, designated as Suite 2000 

Approximately $2,917 per square foot or $1,251.25 per 
month 

$35 per square foot or $15,015 per year 

Annual adjustment on July 1 of each year of the term of 
the lease, based on the Consumer Price Index (CPI), but 
no less than 3 percent annually and no more than 7 
percent annually (see Comment 11). 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

96 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Term of Lease: 



October 1, 2001 through September 30, 2004, a three-year 
period 



Option to Terminate: Tenant has the right to terminate the Lease upon 60 days 

prior written notice 

Utilities and Services: Provided by the City 



Other Major Lease 
Provisions: 



The proposed lease contains other major provisions, 
including (a) that the tenant shall have the right to rent 
one parking space at the then fair market value of the 
spaces to be determined by the City; and (b) that the City 
shall have the right to relocate the tenant one time to 
other similar space within the building at any time during 
the 3-year term of the lease. 



Certificates of Participation 

Under the proposed resolution, the purchase of the 
building at 30 Van Ness Avenue would be financed by the 
sale of Certificates of Participation (COPs) in an amount 
not to exceed $37,830,000. Of the COPs in the amount of 
$37,830,000, $35,950,000 Series 2001A would be tax- 
exempt certificates and $1,880,000 Taxable Series 2001B 
would be taxable. The attached memorandum 

(Attachment II) provided by Ms. Nadia Sesay of the 
Mayor's Office of Public Finance, provides details of the 
proposed sale of the COPs. 

Ms. Sesay states that, because 15,191 square feet of the 
office space at 30 Van Ness Avenue is currently occupied 
by commercial tenants, $1,880,000 or approximately 5 
percent of the proposed sale of COPs would be in 5-year 
taxable COPs, based on a financial analysis prepared by 
outside tax counsel. 1 

Ms. Sesay advises that the 5-year taxable COPs in the 
amount of $1,880,000 would be sold at an estimated 
interest rate of 6.15 percent, for a total debt service of 



1 The actual amount of COPs to be issued as Taxable Series 2001B was determined by outside tax 
counsel, based on a formula established by the Federal Internal Revenue Code. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

97 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



approximately $2,233,641 over the 5-year period and an 
estimated average annual debt service of $446,728. 

In addition, Ms. Sesay states that the City would sell 
$35,950,000 in tax-exempt COPs, at an estimated interest 
rate of 5.77 percent, to be amortized over a 30-year period. 
Total debt service over a 30-year period would be 
approximately $78,359,090 and an estimated average 
annual debt service of $2,611,970. 

Total combined estimated debt service over the life of the 
Certificates (5 years for Taxable Series 200 IB and 30 
years for Tax-Exempt Series 2001A) would be 
approximately $80,592,731. 

Attachment III, provided by Ms. Sesay, shows the (a) 
projected annual debt service and total debt service of 
approximately $80,592,731 over the life of the COPs, (b) 
the City's projected operating and maintenance costs of 
approximately $70,728,788 for 30 Van Ness Avenue over 
the 30-year period, and (c) projected savings to the City 
from avoiding City department rents if the City were to 
continue to lease space at 30 Van Ness Avenue and 
projected revenue to the City from rental payments from 
the Herbst Foundation, Merriman Brothers, and 
commercial tenants, totaling approximately $220,548,566. 
As shown in Attachment III, total estimated savings to 
the City in present value terms would be $24,991,068 
over 30 years, and estimated average annual present 
value savings would be $833, 036. 2 



2 These estimates are based on the difference between (a) avoided rent and paid by the City for office 
space at 30 Van Ness Avenue over a 30-year period and revenues to the City from commercial leases, 
including the proposed Herbst Foundation and Merriman Brother leases, totaling $220,548,566, and 
(b) the debt service costs to the City for tax-exempt COPs at 5.77 percent interest over a 30-year 
period, plus debt service costs for taxable COPs at 6.15 percent interest over a 5-year period, 
totaling $80,592,731, plus estimated operating and maintenance costs over a 30-year period, totaling 
$70,728,788. According to these estimates, the proposed purchase of 30 Van Ness Avenue would 
result in cost savings over a 30-year period of $69,227,047 ($220,548,566 less $80,592,731, less 
$70,728,788). The present value of cost savings of $69,227,047 over 30 years would equal 
$24,991,068, or an average of $833,036 per year. These cost savings estimates assume that if the 
City were to continue to lease rather than purchase the subject property, the fair market rental 
value of the property would be $42 per square foot per year when the current lease agreements 
expire. The current average rent per square foot for City departments occupying space at 30 Van 
Ness Avenue is $22.72. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

98 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



According to Ms. Sesay, debt service on the proposed 
COPs would be budgeted in the eight City departments' 
budgets listed in Attachment I, which currently occupy 
space in 30 Van Ness Avenue. Under the terms of the 
Trust Agreement, the COPs would be secured by the base 
rental payments made by the City. The Board of 
Supervisors would be required to appropriate the rental 
payments in the annual budgets of these eight City 
departments to pay for the COPs debt service. 

In addition, a Reserve Fund from the initial COPs 
proceeds would be established, equal to the lesser of (a) 
the maximum annual rental payments in the Project 
Lease (see below), (b) 125 percent of the average rental 
payments in the Project Lease, or (c) 10 percent of the net 
proceeds derived from the sale of the Certificates. 



The sources and uses of funds for the acquisition of the 
subject property at 30 Van Ness Avenue are as follows: 

Source of funds: 



Certificates of Participation 


$37,830,000 


Use of funds: 




Purchase of 30 Van Ness Avenue 


$32,600,000 


Capital improvements 


1,135,500 


COPs issuance costs 


749,800 


Reserve fund 


2,733,510 


Certificates insurance premiums 


604,445 


Rounding 


6,745 


Total 


$37,830,000 



Attachment rV contains details of the estimated $749,800 
COPs issuance costs. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 
99 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Project Lease and Trust Agreement 

During the period from the close of escrow to the date 
when the COPs have been paid in full (approximately 30 
years and 4 months), the City would enter into both a 
Project Lease and a Trust Agreement for the property at 
30 Van Ness Avenue. Under the Trust Agreement, a 
Trustee would be appointed to receive and hold base 
rental payments made by the City and to pay debt service 
payments to the holders of the COPs. The Trust 
Agreement provides the establishment of separate funds 
for the deposit of the proceeds of the sale of the COPs for 
(a) issuance costs, (b) acquisition costs, including 
purchase price and closing costs, (c) costs of 
improvements, and (d) required reserve funds noted 
above. In addition, the Trustee would maintain a fund for 
depositing base rental payments made to the Trustee by 
the City under the terms of the Project Lease. Such base 
rental payments would be used to make interest and/ or 
principal payments with respect to the COPs. 

Under the terms of the Project Lease, the Trustee would 
lease the property at 30 Van Ness Avenue to the City for 
the period from the date of the close of escrow to the date 
when the COPs had been paid in full. The City would pay 
to the Trustee base rental payments, equal to the debt 
service on the COPs. In addition to base rental 
payments, the City would be required to pay additional 
payments, including (a) insurance premiums, (b) Trustee 
fees and expenses not covered by proceeds from the sale of 
the COPs, (c) required funds to replenish amounts on 
deposit in the reserve fund if the reserve fund has been 
drawn down for principal and interest payments, and (d) 
required funds for the repair and maintenance of the 
subject property. The City would pay these additional 
payments to the Trustee. Under the terms of the Project 
Lease, total base rental and additional annual payments 
would not exceed the total fair market rental value of the 
property for that year. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

100 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Comments: Purchase Agreement 

1. Under the terms of the Purchase Agreement, if the City- 
has not closed escrow within 120 days after the date that 
the Purchase Agreement is signed by both parties, then 
commencing on the 121 st day after the signing date and 
continuing on each 30 th day thereafter until the ear Her of 
the closing date or the 240 th day after the signing date 
(each 30 th day a "Level 1 Adjustment Date"), the City 
would pay an increased purchase price of $100,000 as of 
each Level 1 Adjustment Date. The "First Amendment" 
to the Purchase Agreement defines the signing date as 
February 9, 2001, and therefore, 120 days after the 
signing date would be June 9, 2001. Under the Purchase 
Agreement, the purchase price for the subject property is 
$32,000,000, or $600,000 less than the purchase price of 
$32,600,000 provided by the Real Estate Division. 

2. The Purchase Agreement further states that if the City 
has not closed escrow within 240 days after the date the 
Purchase Agreement is signed, or by October 7, 2001, 
then commencing on the 241 st day after the signing date 
and continuing on each 30 th day thereafter until closing 
(each 30 th day, a "Level 2 Adjustment Date") the City 
would pay an increased purchase price of $200,000 as of 
each Level 2 Adjustment Date. Under the Purchase 
Agreement, the purchase price of 30 Van Ness Avenue 
would equal $32,600,000 on the 241 st day after the 
signing date, or October 8, 2001, and increase by $200,000 
every 30 days. 3 As stated in the attached memorandum 
(Attachment V), provided by Mr. Anthony DeLucchi of the 
Real Estate Division, the City agreed to an escalating 
purchase price, starting at $32,000,000 and escalating by 
$100,000 every 30 days, beginning June 9, 2001, to meet 
the Seller's requirements to provide a motivation to close 
at the earliest possible date. According to Mr. Charlie 
Dunn of the Real Estate Division, the Real Estate 
Division anticipates that escrow will close prior to October 
7, 2001, and that the purchase price for 30 Van Ness 
Avenue will not exceed $32,600,000. 



3 For example, if the City did not close escrow until December 8, 2001, or the 301" day after the 
signing date, the total purchase price for 30 Van Ness Avenue would be $33,000,000. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

101 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



3. Upon Board of Supervisors approval of the proposed 
resolution, the City Attorney's Office would proceed with 
a validation action, which would take 90 days pursuant to 
State law, to validate the City's authority to execute and 
deliver COPs in order to purchase of the subject property. 
According to Ms. Hazel Brandt of the City Attorney's 
Office, upon the satisfaction of the conditions precedent in 
the Purchase Agreement for the benefit of the City and 
the Seller respectively, the successful validation 
proceeding, and the execution, sale, and delivery of the 
COPs, the purchase of the building can be completed. 

4. The proposed purchase price of $32,600,000 equals 
approximately $180 per square foot for 180,939 square 
feet of building space ($32,600,000 divided by 180,939 
square feet equals $180 per square foot). According to Mr. 
Dunn, the purchase price of $32,600,000 represents fair 
market value, based on an independent appraisal, 
performed by Tattersol and Associates, retained by the 
Real Estate Division. 

5. Under the terms of the Purchase Agreement, the 
property to be purchased includes an existing five-story 
office building at 30 Van Ness Avenue; all fixtures, 
apparatus, equipment, and appliances directly used in 
operating the property, such as heating and air 
conditioning systems; and 40 on-site parking spaces. 

6. Under the terms of the Purchase Agreement, the City 
would purchase the building "as is". Mr. Dunn states that 
the City, through the Department of Public Works (DPW), 
has completed inspections of the property. According to 
Mr. Dunn, DPW recommends certain improvements, as 
shown in Attachment VI, for an estimated cost of 
$1,135,500, to be funded by proceeds from the sale of the 
COPs. In addition, the City has received a hazardous 
materials report, indicating that the property contains 
lead-based paints and asbestos in some areas of the 
building. According to Mr. Ron Krzyzanowski of DPW, 
the asbestos and lead found in the building are not 
exposed and do not require immediate removal. Mr. 
Krzyzanowski states that, because the asbestos is not 
exposed, an ongoing asbestos management plan, which 
includes vendor training and required notification, can be 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

102 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



implemented at minimal costs. In addition, Mr. Dunn 
states that the City has received a structural report which 
verifies that seismic upgrades performed in 1993 and 
1997 to the subject building were completed to City code 
requirements in effect in 1993 and 1997. 

7. Mr. Dunn states that the estimated annual operating 
and maintenance costs for the subject property in FY 
2002-2003 are estimated to be $1,414,500, as noted in 
Attachment VII. 

8. According to Mr. Gerald Green of the Department of 
Planning, the proposed purchase of the subject property 
at 30 Van Ness Avenue is in conformance with the 
General Plan. Mr. Green states that the subject property 
is exempt from environmental review, under Class 1(a) 
and 1(d) of State Environment Review guidelines. 

9. The proposed acquisition and financing of 30 Van Ness 
Avenue were approved by the Capital Improvements 
Advisory Committee (CIAC) on March 30, 2001. 

Property Leases 

10. According to Mr. Dunn, the proposed leases between 
the City and Herbst Foundation' and Merriman Brothers 
were part of the sale negotiation and represent fair 
market value. 

11. Under the terms of the proposed leases with Herbst 
Foundation and Merriman Brothers, annual upward 
adjustments to rent would be made based on a ratio of the 
CPI in the initial year of the lease to the CPI for the year 
in which the rent is being adjusted. In no event would the 
annual rent increase be less than 3 percent or more than 
7 percent of the rent in the year immediately preceding 
the annual adjustment date. 

12. The proposed leases contain provisions, asserting that 
the subject leases would not be effective unless approved 
by the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

103 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



13. According to Ms. Sesay, the Mayor's Office of Public 
Finance will be submitting an Amendment of the Whole 
to the subject resolution regarding the COPs financing. 
However, as of the writing of this report, the Mayor's 
Office of Public Finance has not provided the Budget 
Analyst with the Amendment of the Whole and related 
financing information. Therefore, this report is based on 
the COPs financing information submitted with the 
original resolution. 

Recommendation: Because the Budget Analyst has not received the 

Amendment of the Whole and the related financing 
information, approval of the subject resolution is a policy 
matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET AJSALYST 

104 



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Page 1 of 4 



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108 



Office of the Mayor 
san francisco 




Page 1 of 2. 

Willie Lewis Brown, Jr. 



April 24, 2001 



TO: 



FROM: 



RE: 



Severin Campbell 
Budget Analyst 



Nadia Sesay 
Public Finance 



Certificates of Participation, Series 2001 A and Taxable Series 200 IB 
(30 Van Ness Avenue Project) 



As discussed, the transaction mentioned above will be issued in two series. A tax-exempt series for the 
rentable area occupied by the city which will be funded from proceeds from Series 2001A and taxable 
series for rentable area occupied by retail and the owner which will be funded from proceeds from 
Taxable Series 2001B. See Exhibit D for a list of Tenants. 

The sources and uses of proceeds of the proposed 537,830,000 of Certificates of Participation, Series 
2001 A and Taxable Series 200 IB are as follows: 



Sources: 

Par Amount of Certificates 
Total Sources 

Uses: 

Acquisition Fund 

Improvement Fund 

Cost of Issuance 

Reserve Fund 

Certificates Insurance Premium (75.0bp) 

Rounding 

Total Uses 



Series 2001A Taxable Series 2O01B Issue Summary 



S3 5 .950.000. 00 
535,950,000.00 



530,970,772.05 

1,078,751.89 

712L300.00 

2,597,665.46 

587,693.17 

2.817.43 

535,950,000.00 



51.880.000.00 
51.880,000.00 



537.830.000.00 
S37,830,000.00 



1,629,227.95 532,600,000.00 



56,748.11 

37,500.00 

135,844.54 

16,752.31 

3,927.09 



1,135,500.00 
749,800.00 

2,733,510.00 

604,445.48 

6.744.52 



SI, 880.000.00 537,830,000.00 



The sale of the Series 2001A and Taxable Series 200 IB certificates is tentatively scheduled for the week 
of September 24, 2001. The certificates are to be sold at an interest rate not to exceed 12 percent per year 
and will have a final maturity of 2031, or 30 years for the Series 2001 A and 2006, or 5 years for the 
Taxable Series 200 IB, Based upon conservative estimates given current market conditions, our office 
estimates that the overall effective interest rate on the Series 20Q1A certificates would be approximately 
5.77308% and on the Taxable Series 2001B certificates would be approximately 6.15199%. The 
proposed sale of the Series 20O1A certificates in the amount: of 535,950,000 would result in total debt 
service of approximately 578,359,089.83 over the life of the certificates. The proposed sale of the Taxable 
Series B certificates in the amount of 51,880,000 would result in total debt service of approximately 
52,233,640.83 over the life of the certificates. The combined debt service over the life of the certificates 
would be S80,592,730.66. The average annual debt service payment for the first 5 years would be 



1 OR. CARLTON B. OOODLETT PLACE, ROOM 338, SAN FRANCISCO, CALIFORNIA B4102 

(41S) SS4-5956 
RECYCLED PAPER 



109 



— ~km io-o«» OFFICE OF PUBLIC FINANCE . .Attaehkent II 

Page 2 of 2 

approximately $2,642,577.13 and the average debt service for the remaining 25 years would be 
approximately $2,696,460.52. 

The City expects to save approximately 525 million on a present value basis over 30 years by purchasing 
the property rather than continuing to rent it and translates to an average annual present value savings of 
$833,036. 

I have also attached for your review spreadsheets that illustrates the savings analysis as well as the 
framework provided by Tax Counsel for sizing the issues. 

The current financing schedule anticipates that the certificates would be sold via competitive sale and that 
the transaction would close in September 2001. Pursuant to the Purchase and Sale agreement the purchase 
price as adjusted, shall be $32,400,000 (within 240 days after the execution of the Amended Purchase and 
Sale Agreement) if we close as indicated above. In our number run we have assumed a purchase price of 
532,600,000 to be conservative. 

Co-financial advisors on this project are The Chapman Company and Arimax Financial Advisors Inc., 
both of whom were selected from the Mayor's Office of Public Finance's financial advisory pool, which 
was established iD December 2000 via an RFP process. Jones Hall, Quateman-Zadell, LLP and Law 
Offices of Samuel Norber are serving as bond counsel on the transaction and were selected by the City 
Attorney' s office. 

Please feel free to call me if you have any question (415) 554-5956. 



110 



Attachment III 



K>-Vair<NessTAcq uisito n 




jchednre- 


o£B 


as^Rentaliand%ddItf6nal;\Rental -'-■_■ 






Avoided Rent & 






"iscai 




Building 


Operating 


Tax-Exempt 


Isaz 




Revenue 


Expense 


D/S 


002 


l 


S 3.167,587 


S 1,414,500 


$ 882,539 


003 


2 


4,222,344 


1,456,935 


2,218,066 


004 


3 


4,272,976 


1 ,500,643 


2,220,556 


005 


4 


4,375,758 


1,545,662 


2,217,408 


006 


5 


4,485,178 


1,592.032 


2,218,640 


007 


6 


4,569,511 


1,639,793 


2,219,123 


008 


7 


6,483,585 


1,688,987 


2,653,648 


009 


8 


6,629,770 


1,739,657 


2,656,260 


010 


9 


6,771,163 


1,791,846 


2,656,331 


Oil 


10 


6,945,520 


1,845,602 


2.653,960 


012 


11 


7,045,776 


1,900,970 


2,654,155 


513 


12 


7,084,302 


1,957,999 


2,656,381 


i!4 


13 


7,147,282 


2,016,739 


2,655,220 


■15 


14 


7,271,976 


2,077,241 


2,655,653 


16 


15 


7,388,341 


2,139,558 


2,657,314 


!17 


16 


7,550,093 


2,203,745 


2,654,963 


US 


17 


7,690,674 


2,269,857 


2,653,348 


)19 


18 


7,759,956 


2,337,953 


2,656,925 


320 


19 


7,81 1,160 


2,408,092 


2,655,913 


"21 


20 


8,102,687 


2,480,334 


2,655,395 


22 


21 


8,208,248 


2,554,744 


2,654,709 


)23 


22 


8,253,343 


2,631,387 


2,653,860 


124 


23 


8,333,462 


2,710,328 


2,657,345 


i25 


24 


8,395,569 


2,791,638 


2,654,848 


"26 


25 


8,432,497 


2,875,387 


2,655,999 


327 


26 


8,541,948 


2,961,649 


2,655,329 


>2S 


27 


8,589,140 


3,050,498 


2.652.965 


.29 


28 


8,680,431 


3,142,013 


2,653,461 


530 


29 


8,746,791 


3,236,274 


2,656,223 


)31 


30 


8,785,640 


3,333,362 


2,655,803 


332 


31 


8,805,858 


3,433.363 


2.656.755 


OTAL 
PV 




S 220,548,566 


S 70,728,788 


$ 78,359,090 


ssumpfinns 








jrchase Price 




S 32,600,000 




lr Amount of B 


onds 


S 37,830,000 




lx-exemp 


TIC 




5.7731% 




txable TIC 




6.1520% 




:ase rates 


ncrease to S42/s.f. at end of existing Lease 






Taxable 

D/S 
48,810 
438,425 
434,500 
438,444 
434,756 
438,706 



Total 


Total 


Total 


D/S 


D/S + O&IVT 


Savgs CExpi 


S 931,348 


S 2,345,848 


S 821,739 


2,656,491 


4,113,426 


108,918 


2,655,056 


4,155.699 


117,277 


2,655,851 


4,201,514 


174,244 


2,653,396 


4,245,428 


239,750 


2,657,829 


4,297,622 


271,889 


2,653,648 


4,342,634 


2,140,950 


2,656,260 


4,395,917 


2,233,854 


2,656,331 


4,448,178 


2,322,986 


2,653,960 


4,499,562 


2.445,958 


2,654,155 


4,555,125 


2,490,651 


2,656,381 


4,614,380 


2,469,922 


2,655,220 


4,671,959 


2,475323 


2,655,653 


4,732.893 


2,539,083 


2,657,314 


4.796,872 


2,591,469 


2,654,963 


4,858,707 


2,691,385 


2,653,348 


4,923,205 


2,767,469 


2,656,925 


4,994,878 


2,765,078 


2,655,913 


5,064,004 


2,747,156 


2,655,395 


5,135,729 


2,966,957 


2,654,709 


5,209,453 


2,998,795 


2,653,860 


5,285,247 


2,968,097 


2,657,345 


5,367,673 


2,965,789 


2,654,848 


5,446,486 


2,949,083 


2,655,999 


5,531,386 


2,901,111 


2,655,329 


5,616,978 


2,924,970 


2,652,965 


5,703,463 


• 2,885,677 


2,653,461 


5,795,475 


2,884,956 


2,656,223 


5,892,496 


2,854,295 


2,655,803 


5,989,164 


2,796,476 


2,656.755 


6,090,118 


2.715.740 


S 80,592,731 


S 151,321,519 


S 69.227,047 
S 24,991,068 

833,036 



ill 



APR-25-2001 10:11 



OFFICE OF PUBLIC FINANCE 



City and County of San Francisco 
30 Van Ness Avenue 
Cost of Issuance 

Financial Advisors Fee * 

Bond Counsel Fees 

Rating Agency Fees 

Printing 

Electronic Posting of POS 
Advertising 
Trustee 

Real Estate Closing Costs 
City Administrative Fees 
. Property Insurance 
Rounding 



50,000 

80,000 

40,000 

15,000 

1,500 

5,000 

4,000 

389,000 

97,500 

20,000 

47,800 
749,800 



14155544864 P. 10 

Attachment IV 



112 



TOTAL P. 10 



i-tf-rs-ciD-^tijls! i 1 5 : 57 



CCSr- REAL ESTATE DEPT 



City and County of San Francisco 




415 552 921S P. 02/03 

Attachment V 
D , _^age 1 o£ 2 

Real Estate Division 
Administrative Services Department 



April 25, 2001 



TO: 
FROM: 

RE: 



Harvey Rose 
Budget Analyst 

Anthony J. DeLu 
Director of Prope: 




30 Van Ness Ave Acquisition 
Purchase Price 



escrow, if «ha SaUer Z5£ XI S^Zl^ZX?™ ° f 
are aware, the City has « process and «,fiSS 23?,o ,«? "T' *" y ° u 
a proparty usmg COPs. Thi3 process J, be su Z,Sls fo lows "^ '° '-*- 



60 days 



75 days 



Due Diligence Investigations 
(including all City required reports) 

Board of Supervisor's Approval 
(including Gen Plan Referral, CIAC) 

COP Validation Court Action 
Appeal Period 

Cop Issuance & Funding of Escrow 
Total Estimated time required 



S°n«*£ e Sr J""*". * P " Va,e "** "—*» nd the City's 




(415) SS4^£o W ' S30 VN " aWWcB «P^nauon.doc 
p AX: (41 S) 552-921 6 Office of the Director of Property 

25 Van Ness Avenue, Suite 400 



San Francisco, 94102 



113 



ftPR-25-2001 15:57 



CCSF REAL ESTATE DEPT 



*4X^ •^•jc- 



Attachment V 
rage Z'ot 2 



an escalating purchase price starting at $32,000,000 and escalating $100,000 per month 
after 120 days. This structure met the Seller's requirements to provide a motivation to 
close at the earliest possible date. The Real Estate and the Mayor's Office of Public 
Finance has assumed an actual purchase price of $32,600,000 given the above 240 days 
required by the City to close escrow. 

While not the typical fixed price purchase contract, I hope you can see the value of 
creatively meeting the seller's needs with the proposed price structure. If you have any 
questions regarding this matter, please contact Charlie Dunn of our office at 554-9861. 



cc Nadia Sesay 



H:\WPO0 VNsak\Price explanauon.doc 



114 



TOTAL P. 03 



Attachment VI 

Exhibit E 



30 Van Ness Ave 

CAPITAL IMPROVEMENT BUDGET 

$1,135,000 



Costs based on DPWs FCM Report dated Jan 16. 2001 

Section 1- General Site Conditions 
"Element is Adequate" 

Section 2- Structural* 

Cracked and Spalled. Concrete, etc $49,000 

Section 3-Exterior Systems 

Painting roof mechanical $1 5,000 

Window seals $15,000 

Section 4- Roofing 

New Roof & drainage $470,000 

Section 5- Interior 

4& 5th floor Carpet, Paint & Ceiling tiles $377,500 

Section 6- Plumbing & Fire Spr 
"Element is Adequate" 

Section 7- HVAC 

New Boiler (estimated 5 year remaining life) $200,000 

Other $ 9,000 

Section 8- Elevator 

"Element is Adequate" 

Section 9-Electrical 

"Element is Adequate" 

Section 10-Bldg Control 

"Element is Adequate" 

Section 11 -Lighting 

"Element is Adequate" 

TOTAL $1,135,500 



Report recommends further study 

C:\WrNDOWS\TEMPV-ME00002JDOC 

115 



Attachment VII 



Estimated Annual Payments For Fiscal Year 2002-2003 

1) Debt Service $2,649,000 

2) O&M 

Utilities (1): $233,000 

Janitorial (2): $324,000 

BIdg Day Services $ 63,000 

Scavenger: $ 47,000 

Security (3): $204,000 

Elevator: $ 18,000 

Repairs & Maintenance^): $160,000 

Insurance (5): $ 44,000 

HVAC $ 65,000 

BldgMgmt: $100,000 

COP Trust Services $ 20,000 

Misc: $ 20,000 

O&M SubTotal $1,298,000 

Utility Contingency $116.500 

O&M TOTAL $1,414,500 

TOTAL Occupancy Cost (Debt Service plus O&M) $4,063,500 

Less Income from other Tenants $ 457,116 

City's Occupancy Cost $3,606,384 

City's Occupancy Cost per square foot $ 22 



(1) Based on Hetch Hetchy rate - .6667 times existing 

(2) Based on $1.90 psf to include Supplies, Salaries, Window Washing, 
Pest Control. Etc. Based on the cost per square foot of other City-owned 
buildings. 

(3) 6:00 am to 10:00 pm 

(4) RE estimate of repairs and maintenance after completion of repair items. 

(5) COP required estimate: The insurance estimates covers property, boiler and 
machinery and rental interruption premiums. Liability is covered under the City's 
self-insurance program. 

D. Provide a strategic analysis of the long-term capital needs for the 
Project/Program. 



116 

CD\WP\39VNSalc\CLAC3 
3/07/01 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

Item 14-File 01-0666 



Department: 
Items: 



Description: 



Mayor's Office of Public Finance 
Mayor's Office of Housing 

Resolution authorizing the sale of a total of 
$40,000,000 of General Obligation Bonds 
(Affordable Housing) comprising series 200 1C 
($17,000,000 in tax-exempt bonds) and Series 
2001D ($23,000,000 in taxable bonds). 

On November 5, 1996 voters approved Proposition 
A, which authorized the City to issue up to $100 
million in General Obligation Bonds to develop 
affordable rental housing and provide down- 
payment assistance for first-time home buyers in 
San Francisco. 

To date a total, of $60,000,000 has been authorized 
for sale by the Board of Supervisors. The City sold 
the first series of bonds authorized by Proposition A 
on February 18, 1998 in the amount of 
$20,000,000. ("City and County of San Francisco 
Taxable General Obligation Bonds) (Affordable 
Housing) Series 1998 A"). On June 10, 1999 the 
second series was sold in the amount of 
$20,000,000 ("City and County of San Francisco 
Taxable General Obligation Bonds) (Affordable 
Housing) Series 1999 A"). The third series was sold 
in the amount of $20,000,000 on June 6, 2000 
("City and County of San Francisco Taxable 
General Obligation Bonds) (Affordable Housing) 
Series 2000 D"). 

The proposed resolution authorizes the sale of the 
remaining $40,000,000 under Proposition A 
General Obligation Bonds, to finance the 
development of housing affordable to low-income 
households and down-payment assistance to low- 
and moderate-income first-time home buyers. 

The Mayor's Office of Housing proposes to issue a 
fourth and fifth series with an aggregate principal 
amount of $40,000,000. The Series 2001C bonds 
would be issued on a tax-exempt basis in the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

117 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

amount of $17,000,000 and the Series 2001D bonds 
would be issued on a taxable basis in the amount of 
$23,000,000. The sale of the Series 2001C and the 
2001D are tentatively set for May 30, 2001. 

The general provisions of the bond sale are as 
follows: 

• The sale of the bonds is tentatively scheduled 
for May 30, 2001. 

• The bond sale consists of $17,000,000 Series 
2001C (tax-exempt) and $23,000,000 Series 
2001D (taxable). 

• The bonds would be sold with interest rates not 
to exceed 12 percent per year and would have a 
final maturity date not later than 2021. 

• An official statement describing the bonds to be 
issued is included with the Board of Supervisors' 
file (File 01-0666). The official statement would 
be available to all bidders for the bonds. 

• Bonds will be awarded to the bidder whose bid 
represents the lowest true interest cost to the 
City. 

• The bonds are subject to Article VIII of Chapter 
2 of the City's Administrative Code requiring 
accountability reports for the General 
Obligation Bonds. The Mayor's Office of 
Housing will issue a Bond Accountability Report 
to the Board of Supervisors; the Budget 
Analyst's Office and the Controller when the 
proceeds have been expended. 

• The City Treasurer will act as the fiscal agent. 

Comments: 1. As stated above the interest rates for the proposed bond 

sale under this resolution cannot exceed 12 percent. 

2. According to the Mayor's Office of Public Finance, if the 
bonds are sold on May 30, 2001, the total projected debt 
service on the $17,000,000 in Series 2001C General 
Obligation Bonds (tax-exempt bonds), at an estimated 
effective rate of interest of 5.2 percent, would be 
approximately $27,932,000 over the 20-year life of the 
bonds. The total projected debt service on the 

$23,000,000 Series 2001D General Obligation Bonds 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

118 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



(taxable bonds), based on an estimated effective interest 
rate of approximately 7.43%, would result in a total debt 
service of approximately $44,663,000 over tbe 20-year life 
of tbe bond. Total debt service over approximately 20 
years would amount to $72,595,000 and tbe total 
combined average annual debt service for tbe two series of 
General ObHgation Bonds would be $3,629,000. 

3. Tbe Budget Analyst notes tbat tbe sale of $40,000,000 
in tbe Series 2001C and Series 2001D bonds would result, 
in an increase in tbe Property Tax rate of approximately 
$0.004675 per $100 of assessed value. At tbat rate tbe 
owner of a single-family bouse currently assessed at 
$400,000 would pay increased Property Taxes of $18.70 
annually. 

4. The City's General Obligation Bond debt capacity is 
limited to three percent of the City's net assessed property 
value. According to Ms. Karen Ribble of the Mayor's 
Office of Public Finance, the City's total General 
ObHgation debt capacity is currently $2,329,486,170 or 
three percent of an estimated net assessed property value 
of $77,649,539,000 for FY 2000-2001. 

Currently the City has an estimated $961,740,000 in its 
outstanding aggregate principal amount of General 
Obligation Bond debt. The City will make a principal 
payment of $45,005,000 on June 15, 2001 resulting in a 
reduced outstanding principal amount of $916,735,000 as 
of June 30, 2001. If the subject resolution is approved, the 
City will have $956,735,000 ($916,735,000 plus the 
subject General ObHgation Bond of $40,000,000) in 
General ObHgation Bond Debt and $1,372,751,170 in 
General Obligation bonding capacity remaining 
($2,329,486,170 less $956,735,000). The City's bonding 
capacity varies from time to time as a result of paying off 
previously issued bonds, issuance of new bonds and 
changes in the City's assessed valuation. 

5. The Mayor's Office of Housing has included the full 
amount of the bond sale proceeds in the City's 
PreHminary 2001 Action Plan reviewed by the Finance 
Committee on May 24, 2001 (File 01-0622). Mr. Joe 
LaTorre of the Mayor's Office of Housing, states that the 
Board of Supervisors will receive an annual Affordable 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
119 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 



Housing and Home Ownership Bond Program Report, as 
required by Proposition A and Article VTII of the City's 
Administrative Code for the third year of the program on 
Friday, April 27, 2001. 

The Report will address the following subjects concerning 
the $60,000,000 previously appropriated bond funds. 

• Allocation of FY 2000-2001 Development Account 
Funds 

• Commitments of Bond Funds during FY 2000-2001 

• Projects funded during FY 2000-2001 

• Bond projects Completed during FY 2000-2001 

• Down-payment Assistance Loan Account 

The tables in Attachment I provide a summary of the 
Sources and Uses for the proceeds from the proposed sale 
of $40,000,000 in General Obligation Bonds. 

According to Mr. LaTorre, the Mayor's Office of Housing 
is requesting authorization to issue the full amount of the 
remaining $40,000,000 in General Obligation Affordable 
Housing Bonds in order to expedite the planned housing 
development process as much as possible. Attachment II 
provides a preliminary list of the proposed projects which 
total $45,206,339 to be funded by the new bond proceeds 
in the amount of $39,750,000, after deduction of the 
$250,000 in issuance costs, and $5,456,339 in 
uncommitted General Obligation Bond funds from the 
previously issued $60,000,000 in such bond funds. 

6. According to Mr. LaTorre, issuing the $17,000,000 
Series 2001C on a tax-exempt basis and the $23,000,000 
Series 2001D on a taxable basis, will allow the Mayor's 
Office of Housing to achieve the greatest interest cost 
savings. In addition this will provide the Mayor's Office 
of Housing with the greatest flexibility possible, as there 
are numerous restrictions with regard to how proceeds 
from tax-exempt bond funds can be used in combination 
with other federal programs. Upon review of their list of 
possible commitments, the Mayor's Office of Housing 
identified approximately $17,000,000 worth of projects 
that would be more easily financed with tax-exempt bond 
proceeds. The $23,000,000 will be used for the down- 
payment assistance loan program, which according to Mr. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

120 



Memo to Finance Committee 

May 2, 2001 Finance Committee Meeting 

LaTorre, requires the issuance of taxable bonds and for 
projects with developers which also require taxable bond 
proceeds. 

7. All of the proceeds from the sale of the $40,000,000 in 
General Obligation Bonds will be subject to appropriation 
approval by the Board of Supervisors in the FY 2001-2002 
budget of the Mayor's Office of Housing. The previously 
issued $60,000,000 in such bond funds were appropriated 
through the budget process. 



Recommendation: Approve the proposed resolution. 

Harvey M. Rose 

Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

121 



Attachment I 



Source of Funds 



Description 



Amount 



Total Issuance 

Net Original Issue Premium 



Total Sources of Funds 



$40,000,000 
541,800 

$40,541,800 



Use of Funds 



Description 



Amount 



Deposit to the Housing Account: Development 

Account: Tax-exempt Sub Account 

Deposit to the Housing Account: Development 

Account: Taxable Sub Account 

Underwriter's Discount 

Deposit to the Cost of Issuance Account 



$16,893,750 

22,856,250 

541,800 
250,000 



Total Uses of Funds 



$40,541,800 



Detail Cost of Issuance 



Description 



Amount 



Bond counsel fees 

Financial Advisor Fees 

City Staff Services cost 

POS/OS Printing 

Rating Fees 

Advertising (Bond Buyer and other) 

Contingency 



45,000 
46,000 
63,000 
14,000 
25,125 
3,075 
53,800' 



Total Bond Issuance cost 



$250,000 



1 Pending finalization of costs associated with issuance, unused funds will be added to 
available funds account of the down-payment assistance program and the housing 
development program accounts. 



Source: Mayor's Office of Public Finance 



122 



Attachment II 

Summary of Prior Year General Obligation Bond Issuance and 
Proposed Use of Funds FY2001-2002 





Amount 


Costs of 
Issuance 


Down- 
pa yment 
Assistance 
Account 


Housing 

Development 

Account 


Uncommitted 
Housing 

Development 
. Account 


1998 Issuance 

1999 Issuance 

2000 Issuance 


$20,000,000 
20,000,000 
20,000,000 


$202,000 
185,000 
200,000 


$2,969,700 
5,942,250 
2,970,000 


$16,828,300 
13,872,750 
16,830,000 


$257,764 


5,198,575 


Uncommitted Funds 

from prior bond 

issuance 


Amount 


Costs of 
Issuance 


Down- 
payment 
Assistance 
Account 


Housing 

Development 

Account 


$5,456,339 

Uncommittei 
Housing 

Developmen 
Account 


Proposed 2001 
Issuance 


$40,000,000 


$250,000 


$2,992,500 


$36,757,500 


$36,757,500 


Uncommitted 
Funds from prior 
bond issuance 

Subtotal Funds 
Available: 






2,992,500 




5,456,339 
42,213,839 


Total Funds 
Available 










$45,206,339 



Proposed Uses: 



Housing 
program 



Housing 

Development 

Account 



Anticipated 

Commitment 

Date 



Anticipated 

Completion 

Date 



421 Turk Family rental $2,600,000 Spring 2001 

Friendship House Supportive 3,512,301 Summer 2001 

Geneva/Carter . Family rental 12,600,000 Fall 2001 

Broadway/Battery Family rental 5,087,764 Spring 2002 

145 Taylor Supportive 700,000 Spring 2001 

ALFA Residential Care Supportive 400,000 Fall 2001 

827 Howard Street Senior 3,986,274 Fall 2001 

Notice of Funding Availability Family rental 7,327,500 Fall 2001 

Notice of Funding Availability Senior 6,000,000 Fall 2001 

Available Fund Balance 2,992,500 
(Down-Payment Assistance 

Account) 



September 

2002 
June 2002 
Marcb 2002 
October 2002 
July 2001 
June 2002 
November 

2002 
April 2002 
April 2002 



Total Uses: 



$45,206,339 



Source: Mayor's Office of Housing 



123 



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City Hall 
Dr. Carlton B. Goodlett Place, Room 244 


a| ^ta\lsSf ]*] 


^San Francisco 94102-4689 


^CT^jf^lliL- / 


Tel. No. 554-5184 


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Fax No. 554-5163 


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TDD/TTY No. 544-5227 



BOARD of SUPERVISORS 



AGENDA 

SPECIAL OFF SITE MEETINGS 

^FINANCE COMMITTEE 

Board of Supervisors 

The agenda for the Special Off Site Meetings of the Finance Committee is: An opportunity for the public in 
the various districts to provide input on the City and County of San Francisco 2001 -2002 Budget. The 
meeting dates and times are as follows: 

Saturday, May 5, 2001 ; 1 :00 p.m. 
Grace Cathedral, 1 100 California Street 

Tuesday, May 8, 2001 ; 6:30 p.m., 

Ella Hill Hutch Community Center, 1050 McAllister Street 

Hearing to discuss the neighborhood concerns in District 5. (File 010808) 

Saturday, May 12, 2001; 10:00 a.m., 

James Denman Middle School Auditorium, 241 Oneida Street 

Wednesday, May 16, 2001 ; 7:00 p.m., 

Stonestown YMCA, Lane Seniors Annex, 3150 20 th Avenue 

Thursday, May 17, 2001; 7 p.m., 

Everett Middle School, 450 Church Street DOCUMENTS DEPT. 

Saturday, May 1 9, 2001 , 1 0:00 a.m., 

Richmond Recreation Center, 251 18 th Avenue MAY - l\ 2001 

Saturday, May 19, 2001; 12:00 p.m., SAN FRANCISCO 

Southeast Community Facility, 1800 Oakdale Avenue* PUBLIC LIBRARY 

Tuesday, May 22, 2001 , 6:30 p.m., 

Sunset Recreation Center, 2201 Lawton Street 

Wednesday, May 23, 2001 ; 7 p.m., 

George Moscone Elementary School, 2576 Harrison Street 

Wednesday, May 30, 2001 ; 5:30 p.m., 
Tenderloin Police Station, 301 Eddy Street 

Thursday, May 31 , 2001 , 6:30 p.m., 
Newcomer High School, 2340 Jackson Street 

If a quorum of the Finance Committee members are not present, Supervisor Mark Leno will hold 
a town hall meeting for the purpose of receiving community input on the City and County of San 
Francisco 2001-2002 Budget. 

GLORIA L. YOUNG 
Clerk of the Board 



Requests for foreign language translation at a meeting must be received by the Clerk of the Board of Supervisors 
at least 48 hours before the meeting. For meetings on a Monday or a Tuesday, the request must be made by 
noon of the last business day of the preceding week. 

Disability Access 

The May 5 special off site meeting of the Finance Committee will be held at the Grace Cathedral, 1 100 California 
Street, between Clay and Taylor Streets. The closest accessible MUNI line serving this location is the #24 
Bryant. 

The May 8 special off site meeting of the Finance Committee will be held at the Ella Hifl Hutch Community Center, 
1050 McAllister Street., between Buchanan and Webster Streets. The closest accessible MUNI line serving this 
location is the #31 Balboa. 

The May 12 special off site meeting of the Finance Committee will be held at the James Denman Middle School 
Auditorium, 241 Oneida Street. The closest accessible BART Station is the Balboa Station, located at Geneva 
and San Jose Avenues, one block from James Denman Middle School. Accessible MUNI lines serving this 
location are the J Church, K Ingleside, M Ocean View, #49 Van Ness/Mission, #54 Felton, #29 Sunset, #15 Third 
and the #43 Masonic. 

The May 1 6 special off site meeting of the Finance Committee will be held at the Stonestown YMCA, Lane 
Seniors Annex, 3150 20 th Avenue. The accessible line serving this location is the L-Taraval. 

The May 17 special off site meeting of the Finance Committee will be held at the Everett Middle School, 450 
Church Street, between 16 th and 17 th Streets. The closest accessible BART Station is 16 th Street, four blocks 
from the Everet Middle School. The accessible MUNI line serving this location is the J-Church. 

The first of two May 19 special off site meetings of the Finance Committee will be held at the Richmond 
Recreation Center, 251 18 th Avenue. Accessible MUNI lines serving this location are the #2 Clement and the 
#38-Geary. 

The second May 19 special off site meeting of the Finance Committee will be held at the Southeast Community 
Facility, at 1800 Oakdale Avenue (at Phelps Street). The closest accessible BART Station is located at 24 th and 
Mission Streets. Accessible MUNI lines serving this location are the #23 Monterey and the #44 O'Shaughnessey. 

The May 22 special off site meeting of the Finance Committee will be held at the Sunset Recreation Center, 2201 
Lawton Street. The closest accessible MUNI line serving this location is the N Judah. 

The May 23 special off site meeting of the Finance Committee will be held at the George Moscone Elementary 
School, 2576 Harrison Street. Accessible lines serving this location are the #12 Folsom and #14 Mission. 

The May 30 special off site meeting of the Finance Committee will be held at the Tenderlloin Police Station, at 
301 Eddy Street. The accessible MUNI line serving this location is the #31 Balboa. 

The May 31 special off site meeting of the Finance Committee will be held at Newcomer High School, 2340 
Jackson Street. The accessible MUNI line serving this locations is the #12 Folsom. 

All meeting locations are wheelchair accessible. 

For more information about MUNI accessible services, call 923-6142. 

There is accessible parking in the vicinity of meeting sites. 

The following services are available when requested at least 48 hours before the meeting: 
For American Sign Language interpreters, use of a reader during a meeting, or sound enhancement system, 
contact Violeta Mosuela at (415) 554-7704. 



For a large print copy of agenda or minutes in alternative formats, contact Annette Lonich at (415) 554-7706. The 
Clerk of the Board's Office TTY number for speech-hearing impaired is (415) 554-5227. 
In order to accommodate persons with severe allergies, environmental illness, multiple chemical sensitivity or 
related disabilities, attendees at public meetings are reminded that other attendees may be sensitive to various 
chemical based products. Please help the City to accommodate these individuals. 

Know Your Rights Under the Sunshine Ordinance 

Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, boards, 
councils and other agencies of the City and County exist to conduct the people's business. The Sunshine 
Ordinance assures that deliberations are conducted before the people and that City operations are open to the 
people's review. For more information on your rights under the Sunshine Ordinance (Chapter 67 of the San 
Francisco Administrative Code) or to report a violation of the ordinance, contact Donna Hall; by mail to Clerk of 
the Board of Supervisors, 1 Dr. Carlton B. Goodlett Place, Room 244, by phone at (415) 554-7724, by fax at 
(415) 554-7854 or by email at Donna_Hall@ci.sf.ca.us 

Citizens interested in obtaining a free copy of the Sunshine Ordinance can request a copy from Ms. 
Hall or by printing Chapter 67 of the San Francisco Administrative Code on the Internet, at 
http://www.ci.sf.ca.us/bdsupvrs/sunshine.htm 



FINANCE COMMITTEE 

S.F. BOARD OF SUPERVISORS 

CITY HALL, ROOM 244 

1 DR. CARLTON GOODLETT PLACE 

SAN FRANCISCO. CA 94102-4689 

IMPORTANT HEARING NOTICE!!! 



41 Library 

100 Larkin Street Govt Information Center 







City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, May 09, 2001 



10:00 AM 

Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:10 a.m. 

010667 [Airport Lease Agreement Modification for United Airlines, Inc.] 

Resolution approving Lease Modification Number Fifteen for Lease No. 82-0126 between United Airlines, Inc. 

and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 

4/1 1/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/2/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Airport. 

Continued to May 9, 2001. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Airport; Edward Harrington, 
Controller. 

Continued to May 23, 2001. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010723 [Branch Library General Obligation Bond Issuance] 

Resolution providing for the issuance of not to exceed $105,865,000 aggregate principal amount of City and 
County of San Francisco General Obligation Bonds (Branch Library Facilities Improvement Bonds, 2000); 
authorizing the execution, authentication and registration of said Bonds; providing for the levy of a tax to pay 
the principal and interest thereof; providing for the appointment of depositories and other agents for said 
Bonds; providing for the establishment of accounts related thereto; ratifying certain actions previously taken; 
and granting general authority to City officials to take necessary actions in connection with the authorization, 
issuance, sale and delivery of said bonds. (Mayor) 
4/18/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Karen Riddle, Mayor's Office of Public 
Finance. 

RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Primed at 1:22 I'M on J .? 04 



Finance Committee Meeting Minutes May 9, 2001 



010724 [Branch Library General Obligation Bond Sale] 

Resolution authorizing and directing the sale of not to exceed $17,665,000 City and County of San Francisco 
General Obligation Bonds (Branch Library Facilities Improvement Bonds, 2000) Series 2001 E; prescribing the 
form and terms of said Bonds, authorizing the execution, authentication and registration of said Bonds; 
providing for the appointment of depositories and other agents for said Bonds; providing for the establishment 
of accounts related thereto; approving the forms of Official Notice of Sale and Notice of Intention to Sell 
Bonds; directing the publication of the Notice of Intention to Sell Bonds; approving the form and execution of 
the official statement relating thereto; approving the form of the Continuing Disclosure Certificate; approving 
modifications to documents; ratifying certain actions previously taken; and granting general authority to City 
officials to take necessary actions in connection with the authorization, issuance, sale and delivery of said 
Bonds. (Mayor) 

4/1 8/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Susan Hildreth, City Librarian; Harvey Rose, Budget Analyst. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010443 [Reserved Funds, Fire Department] 

Hearing to consider release of reserved funds, Fire Department (fiscal year 2000-01 budget) in the amount of 
$750,000 for retirement payouts. (Fire Department) 
3/9/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Paul Tobacco, Acting Chief of Department, 
Fire Department; Christine Ragan, Fire Department. 
Release of funds in the amount of $750,000 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010520 [Appropriation, funding the land use and environmental reviews in South of Market and Mission 
District and neighborhood planning in Balboa Park] 

Ordinance appropriating $1,979,143 from surplus Planning Department fee revenue to fund land use studies 
and environmental reviews in South of Market (SOMA) and Mission District areas, neighborhood planning 
measures in Balboa Park, computer aided architectural presentations of large developments, and the creation of 
four (4) positions at the Planning Commission for fiscal year 2000-01. (Controller) 

(Fiscal impact; Companion measure to File 010521.) 
3/22/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Gerald Green, Director, Planning 

Department; Edward Harrington, Controller; Ena Aguirre; Steve Kawa, Mayor's Office. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance appropriating $ 1 ,900,000 from surplus Planning Department fee revenue to fund land use studies 

and environmental reviews in South of Market (SOMA) and Mission District areas, neighborhood planning 

measures in Balboa Park, computer aided architectural presentations of large developments; for the Planning 

Commission for fiscal year 2000-2001, placing $585,000 on reserve. (Controller) 

(Fiscal impact; Companion measure to File 010521.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 2 Printed at 2:22 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



May 9, 2001 



010521 [Public Employment] 

Ordinance amending Ordinance No. 181-00 (Annual Salary Ordinance, 2000/01) reflecting the creation of four 
new positions in City Planning. (Human Resources Department) 

(Fiscal impact.) 

3/22/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Gerald Green, Director of Planning; Ena 
Aguirre; Edward Harrington, Controller; Steve Kawa, Mayor's Office. 
TABLED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010677 [Appropriation, Office of Contract Administration] 
Mayor 

Ordinance appropriating $334,000 from the Wage and Health Care Accessibility Reserve to fund salaries, 
fringe benefits, materials and supplies, and professional services for the Office of Contract Administration 
fiscal year 2000-2001. 

(Fiscal impact; Companion measure to File 010678.) 
4/16/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Kawa, Mayor's Office; Judith Blackwell, 

Director of Purchasing; Severin Campbell, Budget Analyst's Office; Stan Warren, San Francisco Building 

Trades Council; Rick Browning, Vice President, Building Trades Council; Dwayne Jones, Executive Director, 

Young Community Developers; Bob Boileau, Vice President, San Francisco Labor Council; Dennis Lawler, 

Painters Local 4; Tim Paulsen, Organizing Director, SEIU, Local 87; Bill Fiore, Local 21; Jason Fraser, 

Carpenters Local 22. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance appropriating $129,667 from the Wage and Health Care Accessibility Reserve to fund salaries, 

fringe benefits, materials and supplies, and professional services for the Office of Contract Administration 

fiscal year 2000-2001. 

(Fiscal impact; Companion measure to File 010678.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010678 [Public Employment] 
Mayor 

Ordinance amending Ordinance No. 181-00 (Annual Salary Ordinance, 2000/01) reflecting the creation of 
fourteen new positions in Administrative Services, Office of Contract Administration. 

(Fiscal impact.) 

4/16/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Kawa, Mayor's Office; Judith Blackwell, 

Director of Purchasing; Severin Campbell, Budget Analyst's Office; Stan Warren, San Francisco Building 

Trades Council; Rick Browning, Vice President, Building Trades Council; Dwayne Jones. Executive Director, 

Young Community Developers; Bob Boileau, Vice President, San Francisco Labor Council; Dennis Lawler. 

Painters Local 4; Tim Paulsen, Organizing Director, SEIU, Local 87; Bill Fiore, Local 21 ; Jason Fraser, 

Carpenters Local 22. 

AMENDED. 



City and County of San Francisco 



Printed at 2:22 I'M on .? ) 04 



Finance Committee Meeting Minutes May 9, 2001 

Ordinance amending Ordinance No. 181-00 (Annual Salary Ordinance, 2000/01) reflecting the creation of 
seven new positions in Administrative Services, Office of Contract Administration. 

(Fiscal impact.) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010257 [Reserved Funds, Mayor's Office of Economic Development] 

Hearing to consider release of reserved funds, Mayor's Office of Economic Development (fiscal year 2000-01 
budget), in the amount of $13 million to cover gTants to community-based organizations, as well as costs 
incurred by the City for administration of the grant program in coordination with the Department of the 
Environment. (Mayor) 

4/11/01, RECEIVED AND ASSIGNED to Finance Committee. Sponsor requests this item be scheduled for consideration at the April 25, 
2001 meeting. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Supervisor Maxwell; David Assmann, Deputy 
Director, Department of the Environment; Mr. Shaw, Department of the Environment; Mitchell Katz, M.D., 
Director of Health, Department of Public Health; Helen Baloff; Gary Floyd; John Vaccos; Alex Lantsberg, 
Arc Ecology; Dwayne Jones, Executive Director, Young Community Developers; Vickie Peet, Trust for Public 
Land; Ollie Verges; Ena Aguirre; Steve Moss, M Qued. 
Release of funds in the amount of $9,615,121 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010686 [Lease amendment, Theatre Bay Area] 
Supervisor Leno 

Resolution approving and authorizing a First Amendment to Lease with Theatre Bay Area, a California 
nonprofit public benefit corporation, related to certain ticket kiosk premises located on Union Square, San 
Francisco, allowing for the lessee to vacate the original ticket kiosk premises, relocate temporarily to other 
premises and consent to the demolition of the original kiosk improvements; and authorizing and ratifying the 
execution and delivery by the General Manager of the Recreation and Park Department of the First Amendment 
and any related documents, and the taking of such actions by said General Manager as may be necessary in 
furtherance of this resolution. 

4/16/01, REFERRED FOR ADOPTION WITHOUT COMMITTEE REFERENCE AGENDA AT THE NEXT BOARD MEETING. 
4/23/01 , SEVERED FROM FOR ADOPTION WITHOUT COMMITTEE REFERENCE AGENDA. Supervisor Peskin requested this 
item be severed so it could be considered separately. 

4/23/01 , REFERRED to Finance Committee. Supervisor McGoldrick requested that this matter be referred to committee. 
Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Elizabeth Goldstein, General Manager, 
Recreation and Park Department; Kate Fulton, Theater Bay Area. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



ADJOURNMENT 



The meeting adjourned at 2:00 p.m. 



City and County of San Francisco 4 Printed at 2:23 PM on 3/3/04 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



hi 



CITY AND COUNTY 




OF SAN FRANCISCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



TO: Finance Committee 

FROM: Budget Analyst 

SUBJECT: May 9, 2001 Finance Committee Meeting 

Item 1 - File 01-0667 



May 3, 2001 

DOCUMENTS DEPT. 

MAY - 7 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: This item was continued by the Finance Committee at its meeting of May 2, 
2001. 



Department: 
Item: 



Lessor: 
Lessee: 
Term of Lease: 



Effective Date of 
Lease Modification: 



Description: 



Airport 

Resolution approving Lease Modification Number 15 for 
Lease No. 82-0126 between United Air Lines, Inc. 
(United), and the City and County of San Francisco, 
acting by the through the Airport Commission. 

City and County of San Francisco 

United Airlines, Inc. 

July 1, 1981 through June 30, 2011, with no option to 
renew. 

June 1, 2001 or upon occupancy of said areas if the Board 
of Supervisors has approved the lease and occupancy 
occurs prior to June 1, 2001. 

Under Lease and Use Agreement No. 82-0126 
(Agreement) dated July 1, 1981, by and between the City 
and County of San Francisco and United Air Lines, Inc., 
as previously amended and approved by the Board of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Supervisors, United leases from the Airport 
approximately 442,444 square feet of exclusive use space 
in the North Terminal of the San Francisco International 
Airport. The Agreement was last amended and approved 
by the Board of Supervisors in November of 1999 (File 99- 
1852) for the purpose of relocating United's international 
flights to the new International Terminal and the 
completion of United's new automated baggage system. 

According to Ms. Dorothy Schimke of the Airport, over the 
past approximately 8 years, air passenger traffic in the 
North Terminal had increased so significantly it had 
severely strained the existing concession and airline 
operations space. Therefore, in 1998 the Airport 
undertook a program to expand Boarding Area "F" of the 
North Terminal, adding approximately 49,973 square feet 
of airline operations space under the lease with United 
(see Attachment I, provided by the Airport). 

The purpose of the proposed Lease Modification No. 15 is 
(1) to account for the increase of approximately 49,973 
square feet of exclusive use space in the North Terminal 
used by United Airlines for the expansion of Boarding 
Area "F"; and, (2) the decrease of approximately 462 
square feet of United's exclusive use space from the 
International Terminal, which had been erroneously 
included by the Airport in Modification No. 14, previously 
approved by the Board of Supervisors, as both United's 
exclusive use space and as joint use space (see Comment 
4). Joint use space is defined as airline rental space in a 
facility owned by the Airport which is leased to more than 
one airline for the shared use of all airlines sharing that 
space. Ms. Schimke advises that the subject 

approximately 462 square feet is correctly included in the 
International Terminal as joint use space because the 
space is leased to more than one airline for shared use 
whereas all applicable airlines pay their share of the rent 
for that space. 

Comments: 1. According to Ms. Schimke, the increase of 

approximately 49,973 square feet of exclusive use space in 
the North Terminal for United would result in the 
increase of annual rental to the Airport of $5,013,433, as 
shown in the table below, based on the rental rates in 
effect from February 1, 2001. Ms. Schimke advises that 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



this increase represents a 15% increase in United's rent 
for the North Terminal. Ms. Schimke states that rental 
rates are based on the Airport's Rates and Charges for 
Airlines, which are adjusted each July 1 by the Airport 
using the rates and charges methodology prescribed in 
the Lease and Use Agreements, as previously approved by 
the Board of Supervisors, and contained in Attachment II, 
provided by the Airport. Ms. Schimke notes that the 
rental rates in effect from July 1, 2000 were updated on 
February 1, 2001 due to a revenue shortfall primarily 
from the delayed opening of the International Terminal. 

2. According to Ms. Schimke, Modification No. 15 of the 
subject Agreement adds space to United's North Terminal 
leasehold following the completion of the expansion of 
Boarding Area "F' in the following categories: 



Category Description 

I Gate Holdroom Space 

II New Red Carpet Club and Mezzanine Offices 
located above the flight departure level. 

III Enclosed Space located below the flight 
departure level. 

IV Miscellaneous Mechanical Space 



V 



Unenclosed Storage 



The approximately 49,973 square feet will be added under 
the United lease in the following five categories of space: 



North Terminal Building 




Annual Rent 










Total 






per Sq Ft by 




Current 


Proposed Sq 


Annual Rent 


Proposed 


Anticipated 


Category 


Category 


Current Sq Ft 


Annual Rent 


Ft Increase 


Increase 


SqFt 


Annual Rent 


1 


$ 154.78 


62,572 


$ 9,684,894 


552 


$ 85,439 


63,124 


$ 9,770,333 


II 


116.09 


85,703 


9,949,261 


35,242 


4,091,244 


120,945 


14,040,505 


III 


77.40 


65,613 


5,078,446 


9,484 


734,062 


75,097 


5,812,508 


IV 


38.69 


211,191 


8,170,980 


' 1,293 


50,026 


212,484 


8,221,006 


V 


15.48 


17,365 


268,810 


3,402 


52,663 


20,767 


321,473 


Total 




442,444 


$ 33,152,392 


49,973 


S 5,013,433 


492,417 


538,165,825 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



3. Ms. Schimke advises that the building expansion of 
Boarding Area "F\ including the subject 49,973 square 
feet of space for United, was substantially completed in 
November of 2000. United is currently constructing its 
tenant improvements in the North Terminal, which are 
expected to be completed by late Summer of 2001. 
Therefore, United has not yet begun to occupy the subject 
49,973 additional square feet. According to Ms. Schimke, 
the proposed Modificaticn No. 15 will become effective on 
June 1, 2001 or upon United's occupancy of the subject 
additional 49,973 square feet, whichever is earlier, in 
accordance with the latest established rates as of 
February 1, 2001. 

4. Ms. Schimke states that Modification No. 14, 
previously approved by the Board of Supervisors, 
erroneously included approximately 462 square feet of 
exclusive use Category III or Enclosed space in the 
International Terminal. Ms. Schimke advises that the 
inclusion of the subject approximately 462 square feet of 
exclusive use Category III space for United was an 
administrative error. According to Ms. Schimke the 
approximately 462 square feet of space is properly defined 
as joint use space in the International Terminal and not 
as exclusive use space. Ms. Schimke advises that all 
rental rates are the same whether classified as exclusive 
use space or joint use space. Regarding this 462 square 
feet in the International Terminal which, according to Ms. 
Schimke, United was erroneously charged twice by the 
Airport, as both exclusive use space and joint use space, 
the Airport will still receive, on an annual basis, $35,759 
for the subject approximately 462 square feet under joint 
use space, of which United will pay its proportionate 
share of the rent. The Airport proposes to refund the 
portion of the rent paid twice by United. This refund is 
estimated to be $15,506 for the exclusive use space for the 
period from December 10, 2000, when United took joint 
use occupancy of the subject square footage until approval 
of this legislation by the Board of Supervisors and the 
Mayor. June 1, 2001 was used as the basis for the 
calculation of the $15,506 based on the estimated date of 
final approval of this resolution. If approval of this 
renovation is finalized prior to June 1, 2001 then United 
would be refunded less than $15,506. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



5. Given the reduction in the annual revenues of $35,759 
for the approximately 462 square feet of exclusive use 
Category III space in the International Terminal that 
United was being charged by the Airport and the increase 
in annual revenue to be paid by United for the additional 
49,973 square feet of exclusive use space of $5,013,433 
from the expansion of Boarding Area "F' in the North 
Terminal, the total net annual increase in rent revenues 
payable by United to the Airport is estimated to be 
$4,977,674 ($5,013,433 less $35,759). Ms. Schimke 
advises that the rental rates beginning in July 1, 2001 are 
anticipated to be higher than the rates currently being 
charged. 

6. The proposed resolution does not include language for 
the deletion of approximately 462 square feet exclusive 
use space in the International Terminal which had been 
charged to United. 

7. Based on the inquires of the Finance Committee at its 
meeting of May 2, 2001, Mr. John Martin, Airport 
Director, provided a memorandum (Attachment III) 
pertaining to the Airport's policy of initiating rental 
charges at the time of beneficial occupancy. 

Recommendations: 1. Amend line fifteen of the proposed resolution to 

account for the deletion of approximately 462 square feet 
of exclusive use space in the International Terminal by 
adding, "and deletion of approximately 462 square feet of 
the International Terminal as exclusive use space," in 
accordance with Comment 6 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 




' ," . Attachment II 

FROM SF1A DEPT. OF AVIATION MGMT. (650)621 4535 (WED) 4. 25' 01 ■. Page X of 2 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 
CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: Budget Analyst DATE: April 24, 2001 

FROM: Dorothy Schimke 

Airport Rates and Charges 

Background 

In 1979 a number of airlines filed suit to litigate certain complaints against the City, 
including an allegation that Airport revenues were being unlawfully diverted to the City's 
General Fund. (Federal law prohibits the expenditure of airport revenues for non-airport 
purposes.) In early 1980 the City and the airlines that were parties to the suit entered into 
settlement negotiations that resulted in a detailed Settlement Agreement and an Airline- 
Airport Lease and Use Agreement ("the LU")- Provisions for a substantial restructuring 
of the financial operation of the Airport, including the methodology for calculating 
Airport Rates and Charges, were incorporated into the LU as part of the Settlement 
Agreement. 

Calculation of Rates and Charges 

In general, the airlines are obligated to pay terminal building rental rates and landing fees 
in amounts that, when included with all other Airport revenues, will be sufficient to cover 
all annual Airport costs. Rates are adjusted annually. Terrninal rate adjustments are 
based en the average cost per square foot of providing, maintaining and operating the 
terminal b uildin g areas. 

A simplified outline of the methodology for calculating Airport terrninal rents is as 
follows: 

1. Expense Forecasting. Airport forecasts its expenses, including both operating and 
capital expenses, for the upcoming fiscal year. 



■ • • .. Attachment II 

k SFIA DEPT. OF AVIATION MGMT. (650)821 4535 (WED) 4. 25' 01 Page 2 of 2 

Budge Analyst 
April 24, 2001 
Page 2 



2. Revenue Forecasting. Airport forecasts its non-airline terminal revenues for the 
upcoming fiscal year. 

• Concession revenues 

• Rents from non-airline tenants 

• Other revenues (e.g., interest on unexpended capital funds) 

1. Annual Service Payment. 15% of Concession revenues goes to City's general fund 
as compensation for indirect services to the Airport. 

2. CaJcuIation. 

• Non-airline revenues (net of Annual Service Payment) are set off against 
projected expenses. 

• Remainder (expenses that are not covered by non-airline revenues) is divided by 
the total square feet of te rminal space rented by airlines to determine average rent 
per square foot, which is then apportioned into five rate categories. 

• The higher the number of square feet rented to airlines, the lower the effective 
rental rate required to recover the terminal costs. 



FROM SFIA DEPT. OF AVIATION MGMT. (650) 821 4535 (FRI) 4. 20' 01 



Attachment I 



BOARDING AREA F 
HUB AND THUMB 



EXPANSION AREAS 




FROM SFO INTERNATIONAL AVIATION DEVELOPMENT 

a ;ii/m wi in nviiim \VJ\II KILL J\I\J'J 



(THU) 5. 3' 01 12: 26/S'i 
(lnuj d. ^ 11 li:UU/ v 



Attachment III 



AiitreiT 
Of i*« WUwCUCfl 

Wllllt 1 MOWN. JR. 



KtRKT t.HdMAiy 

i»«Er*iiirO(.;. 
I'itt MCJIMV7 

r»rvi no 






San Francisco International Ai'rport 

May 3, 2001 



RO. Box 8097 

San FrancLSLO.CA 94 ].■>(; 

7W 05C.S2l.50OU 

wwvw.ffyifacorri 



Honorable Mark Leno 

Chair, Finance Comrnjt»e 

Board of Supervisors 

City and County oF San Francisco 

1 Dr. Carton B. GoocDett Place 

Chy Hafl, Room 244 

San Francisco, CA ?4I02-4oB9 

Dear Supervisor Leno: 

rental policy" b one of di kSfcSw <° ^SSl, ^n**^ occupancy 

Use Agreement himZ Jen^Hri *T ** ^T °* m of *« Lease ** 

operation of the "busing ^ffi£££!£ COnCttsk,n i has P^ rent prior to the 
Miw business, i rus is a standard at airports across the country. 

Oty and County Silffi ^bT£2£? £££ f||WE££ 
practice id not "double charge" the t^^!h7Z^^^A .* !? busln «*« 

meet our high standards 52Ll£S^ li'SjE?*! 'r^**' 4 ""^ to 
being considered by the B^SSSTti 2?J2? "i,** *** ""■"faWlonf 

SSL2LS^2- h S "f^ ** 'n*™**"* carrf^s and dissuade smafl 
coiKessioruiires from bidding on future rental feces. w smau 

Thank you for your consideration. I *and ready to discuss this matter with you further. 



Very 




ours, 



Martin 
Director 



cc: Members, Finance Commhtee 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Items 2 and 3 - Files 01-0723 and 01-0724 

Departments: Mayor's Office of Public Finance 

Public Library 

Items: Item 2, File 01-0723 is a resolution providing for the 

issuance of not to exceed $105,865,000 aggregate 
principal amount of City and County of San Francisco 
General Obligation Bonds (Branch Library Facilities 
Improvement Bonds, 2000); authorizing the execution, 
authentication and registration of said bonds; providing 
for the levy of a tax to pay the principal and interest 
thereof; providing for the appointment of depositories and 
other agents for said bonds; providing for the 
establishment of accounts relating thereto; ratifying 
certain actions previously taken; and granting general 
authority to City Officials to take necessary actions in 
connection with the authorization, issuance, sale and 
delivery of said bonds. 

Item 3, File 01-0724 resolution authorizing and directing 
the sale of not to exceed $17,665,000 in City and County 
of San Francisco General Obligation Bonds (Branch 
Library Facilities Improvement Bonds, 2000), Series 
2001E; prescribing the form and terms of said bonds; 
authorizing the execution, authentication and registration 
of said bonds; providing for the appointment of 
depositories and other agents for said bonds; providing for 
the establishment of accounts relating thereto; approving 
the forms of the Official Notice of Sale and the Notice of 
Intention to Sell Bonds; directing the publication of the 
Notice of Intention to Sell Bonds; approving the form and 
execution of the Official Statement relating thereto; 
approving the form of the Continuing Disclosure 
Certificate; approving modifications to the documents; 
ratifying certain actions previously taken; and granting 
general authority to City Officials to take necessary- 
actions in connection with the authorization, issuance, 
sale and delivery of said bonds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Amount: 



Description 


Amount 


Item 11, File 01-0723 

Authorization for the Issuance of Branch 
Library Facilities Improvement Bonds 


$105,865,000 


Item 12, File 01-0724 

Authorization for the Sale of the Initial Series of 
the above Branch Library Facilities 
Improvement Bonds, Series 2001E 


$17,665,000 



Description: 



On November 7, 2000 San Francisco voters approved 
Proposition A, Branch Library Facilities Improvement 
Bonds, which authorized the City to issue up to 
$105,865,000 in General Obligation Bonds to (1) 
rehabilitate, renovate, and improve 19 existing Branch 
Libraries; (2) acquire land and construct four new Branch 
Libraries currently housed in leased facilities; (3) 
construct one new Branch Library in the Mission Bay 
neighborhood; (4) rehabilitate Brooks Hall for the Public 
Library's use; and, (5) development of a system-wide 
administrative support center. Attachment I, provided by 
the Public Library, contains a list and the estimated costs 
of all of the proposed projects. Total estimated project 
costs are $118,265,000. Attachment I also contains the 
funding sources including the subject Branch Library 
Facilities Improvement Bonds of $105,865,000. 



File 01-0723 would authorize the issuance as well as 
establish the general terms and procedures for the 
issuance of the $105,865,000 in Branch Library Facilities 
Improvement Bonds. 

File 01-0724 would authorize the sale of the initial series 
(Series 200 IE) of the subject bonds, in an aggregate 
principal amount of up to $17,665,000. Upon sale of the 
subject bonds, the remaining amount of unsold bonds 
would equal $88,200,000, which would be subject to 
subsequent approval of the Board of Supervisors. 

File 01-0723 



The proposed resolution would authorize the issuance of 
an aggregate principal amount not to exceed $105,865,000 
of Branch Library Facilities Improvement Bonds, 2000 for 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



the acquisition, rehabilitation, renovation, improvement, 
construction and reconstruction of certain improvements 
and renovations to 24 Branch Libraries and to the Public 
Library's System-Wide Support Center/Brooks Hall. 

General provisions regarding the proposed issuance of the 
Branch Library Facilities Improvement Bonds are as 
follows: 

• The bonds shall be divided into various series, as 
authorized by the Board of Supervisors. 

• Property Taxes collected to pay debt service on the 
bonds would be deposited in a special account, which 
would be created specifically for this purpose. 

• The proceeds of the sale of the bonds would be 
deposited into a Project Account, maintained by the 
City Treasurer, and would be applied exclusively to 
the projects approved under the subject Bond. 

• The City Treasurer may appoint fiscal agents or 
financial institutions to distribute bond interest and 
principal payments. 

• The Board of Supervisors may, by resolution, 
authorize and direct the sale of any series of bonds to 
provide for the defeasance (is either the full repayment 
of the bonds or the advance refunding of bonds by 
placement of sufficient funds in an escrow account 
with sufficiently high quality investments to meet 
future debt service requirements) of such series bonds. 

File 01-0724 

The proposed resolution would authorize and direct the 
sale of the initial series of the Branch Library Facilities 
Improvement Bonds, Series 2001E, in a principal amount 
not to exceed $17,665,000. The proposed resolution would 
also approve the form and terms of the documents and 
official notices related to the sale, and authorize City 
officials to take various actions necessary to carry out the 
sale of bonds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



General provisions in the subject resolution regarding the 
sale of the bonds are as follows: 

• The sale of the bonds is tentatively scheduled for June 
14, 2001. 

• According to Ms. Karen Ribble in the Mayor's Office of 
Public Finance, the bonds would be sold at an interest 
rate not to exceed 12 percent per year and would have 
a final maturity of no later than June 15, 2026. 
However, the bonds will have a term of 20 years; the 
difference would allow for any possible delay in the 
sale of such bonds. Ms. Ribbble advises that June 15, 
2021 is the anticipated maturity date of the subject 
bonds. 

• An official statement describing the proposed bonds is 
referenced in the proposed resolution for approval by 
the Board of Supervisors and is contained in File 01- 
0724. The official statement would be available to all 
potential bidders for the bonds. 

• Bonds would be awarded to the bidder whose bid 
represents the lowest total interest cost to the City. 

As noted above, the total $105,865,000 in Branch Library 
Facilities Improvement Bonds will be used to rehabilitate, 
renovate, and improve 19 existing Branch Libraries and 
acquire land and construct four new Branch Libraries 
currently housed in leased facilities; construct one new 
Branch Library in the Mission Bay neighborhood; 
rehabilitate Brooks Hall for the Public Library's use; and 
develop a system-wide administrative support center. A 
list of the Branch Libraries is shown in Attachment I. 
The four new Branch Libraries to be constructed are the 
Glen Park, the Ingleside, the Portola and the Visitacion 
Valley Branch Libraries. According to Mr. George Nichols 
of the Public Library, rehabilitation and renovation of the 
19 existing branch libraries includes seismic upgrades, 
improved disability access, mitigation of hazardous 
materials, modernizing and upgrading of building 
systems, and other improvements. Mr. Nichols advises 
that to replace the four branch libraries currently housed 
in leased facilities, the Public Library will assess sites, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 






Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

acquire land, and design and construct the buildings. The 
estimated costs for the projects are included in the total 
project costs of $118,265,000 as shown in Attachment I. 
Mr. Nichols states that the Public Library is working on a 
potential partnership with the Redevelopment Agency to 
place the proposed Mission Bay Branch Library with a 
senior housing development that is being planned. 
Improvements to Brooks Hall and development of a 
system-wide administrative support center are also 
provided for by the bond measure, according to Mr. 
Nichols. 

Mr. Nichols advises that the construction and 
improvements of the Branch Libraries will occur over a 
ten-year period. As shown in Attachment I, the 
$118,265,000 in total project costs will be funded with (a) 
the subject $105,865,000 in Branch Library Facilities 
Improvement Bond Funds; (b) $2,400,000 in Earthquake 
Safety Program II (ESP II) funds; and (c) $10,000,000 in 
State Proposition 14 1 funds which will be awarded to 
libraries statewide on a competitive basis. 

According to Mr. Nichols, under File 01-0724, the 
$17,665,000 to be sold, in Branch Library Facilities 
Improvement Bonds, Series 2000E, will be used for (1) the 
architectural and engineering planning and design for the 
first five branch library improvement projects, including 
the Marina, Noe Valley, Parkside, Richmond, and 
Visitacion Valley Branch Libraries; (2) the acquisition of 
land for the four branch libraries currently housed in 
leased facilities, including Visitacion Valley, Glen Park, 
Portola, and Ingleside Branch Libraries; (3) the build-out 
of the Mission Bay Branch Library; and, (4) the planning 
and design of Brooks Hall. 

Budget: The Public Library proposes to expend the estimated 

$17,665,000 (File 01-0724) in proceeds from the Branch 
Library Facilities Improvement Bonds, Series 2001E, as 
follows: 



1 Proposition 14, approved by the voters in March of 2000, provides $350 million of State-wide funds 
for library construction projects, which is available on a competitive basis, and requires a 35 percent 
local match. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

14 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Program Management $1,138,000 
Architectural & 

Engineering Plan and Design Services 8,796,815 

Site Acquisition Fees & Services 1,646,000 

Site Acquisition 5,834,000 

Bond Issuance Costs 250,000 

Total $17,664,815 

Mr. Nichols advises that the cost noted above are based 
on preliminary estimates. Attachment II, provided by the 
Public Library, contains budget details to support the 
summary budget. 

Comments: 1. According to Ms. Ribble, based on current market 

estimates as of April 16, 2001, the overall effective 
interest rate on the bonds would be approximately 5.27%. 
Under those circumstances, it is estimated that the 
proposed sale of bonds in the amount of $17,665,000 
would result in a total debt service (from June 14, 2001 
through June 15, 2021) of approximately $28,956,000, 
including the principal amount of $17,665,000 and 
interest payments of $11,291,000 with an estimated 
average annual debt service over the estimated 20-year 
life of the bonds of $1,447,800. 

2. Ms. Ribble states that the proposed sale of the total of 
$105,865,000 in General Obligation bonds (File 01-0723), 
assuming that the bonds would be sold in 8 series with an 
interest rate between six and seven percent, would result 
in total interest costs of approximately $89,886,860, and 
total debt service of approximately $195,751,860 
($105,865,000 in principal costs plus $89,886,860 in 
interest) over the life of the Library Facilities 
Improvement bonds. Ms. Ribble states that each series 
would have a 20-year life. 

3. According to Ms. Ribble, the proposed Series 2001E 
sale of General Obligation Bonds in the amount of 
$17,665,000 would result in an increase in the Property 
Tax rate of approximately $0.001865 per $100 of assessed 
value. At that rate, the owner of a single-family residence 
assessed at $400,000 would pay approximately $7.46 in 
additional Property Taxes annually due to the issuance of 
these bonds. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
15 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



4. Ms. Ribble states that the cost of selling $17,665,000 
Series 200 IE, including fees for outside bond counsel, 
financial advisors, financial printing, advertising, and the 
services of the Mayor's Office of Pub he Finance, the 
Treasurer's Office, the Controller's Office and City 
Attorney, are expected to be approximately $250,000, or 
approximately 1.42 percent of the total value of the bonds 
issued in the amount of $17,665,000. Attachment III, 
provided by the Mayor's Office of Public Finance, details 
the bond issuance costs. 

5. The City's General Obligation Bond debt capacity is 
limited to three percent of the City's net assessed 
property value. According to Ms. Ribble, the City's total 
General Obligation debt capacity is currently 
$2,329,486,170 or three percent of an estimated net 
assessed property value of $77,649,539,270 for FY 2000- 
2001. 

As of May 1, 2001, the City has $961,740,000 in 
outstanding general obligation bond debt. The City will 
make principal payments totaling $45,005,000 on June 
15, 2001 resulting in a reduced outstanding principal 
amount of $916,735,000 as of June 30, 2001. File 01- 
0666, which authorizes the sale of $40,000,000 in General 
Obligation bonds to finance the development of housing 
affordable to low-income households and down-payment 
assistance to low-and moderate-income first-time home 
buyers was recommended for approval by the Finance 
Committee on May 2, 2001. If those bonds are approved 
by the Board of Supervisors, together with the subject File 
01-0724, the City will have $974,400,000 ($916,735,000 
plus the $40,000,000 under File 01-0666 plus the subject 
General Obligation bonds of $17,665,000) in General 
Obligation bond debt outstanding, and $1,355,086,170 in 
General Obligation bonding capacity remaining 
($2,329,486,170 less $974,400,000). The City's bonding 
capacity varies from time to time as a result of paying off 
previously issued bonds, issuance of new bonds and 
changes in the City's assessed valuation. 

6. All of the proceeds from the sale of the $17,665,000 in 
General Obligation Bonds will be subject to appropriation 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



approval by the Board of Supervisors in the FY 2001-2002 
budget of the Public Library. 



Recommendation: Approve the proposed resolutions. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



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19 



1Y-G2-2001 11=14 OFFICE OF PUBLIC FINANCE 



Attachment .III 



Cost of Issuance Breakdown 

Bond Counsel Fees (tad. Expenses) 1 55,000.00 

Financial Advisor Fees (incl. Expenses) 2 34,250.00 

City Staff 90.0O0.00 

POS/OS Printing 14,000.00 

Rating Fees 3 23,750.00 

Advertising (Bond Buyer and other) 7,000.00 

Contingency 26,000.00 

250,000.00 

1 Brown and Wood and Law Office of Pamela S. Jue 

8 Causeway Financial Consulting and Montague DeRose and Associates 

3 Moody's, S&P and Fitch 



Page 1 



20 






Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Item 4 - File 01-0443 

Department: Fire Department 

Item: Hearing to consider the release of reserved Fire Department 

funds in the amount of $750,000 to fund retirement pay-outs. 

Amount: $750,000 

Source of Funds: FY 2000-2001 Fire Department budget. 

Description: As part of the final FY 2000-2001 budget, the Board of 

Supervisors appropriated $2,249,170 from the General Fund to 
the Fire Department for retirement pay-outs. Retirement pay- 
outs, included as part of the retroactive salaries account, 
comprise lump sum payments which compensate eligible Fire 
Department employees for accumulated unused sick leave, 
compensatory time, and vacation time at the time of their 
retirement or separation from the department. The amount 
included in the Fire Department's original FY 2000-2001 budget 
of $2,249,170 was $750,000 more than the amount funded in the 
FY 1999-2000 budget. Because the Fire Department did not 
provide sufficient detail or historical expenditure data to explain 
the increase in budgeted retirement pay-out expenditures, the 
Board of Supervisors placed the additional $750,000 on reserve 
pending submission by the Fire Department of additional 
expenditure details. 

Budget: The Fire Department's expenditure analysis for FY 2000-2001 

retirement pay-outs in the total amount of $2,249,170 is shown 
on the following page: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Expenditure Cateeorv 


Amount 


Subtotal 


Averaee 


40 retirement pay-outs incurred as of 02/16/01 

Other retroactive salary pay-outs incurred as of 02/16/01 

Incurred payments subtotal: 


$1,405,836 
253.942 


$1,659,778 


$35,146 


Six pending retirement pay-outs 

Other pending retroactive salary pay-outs 

Pending payments subtotal- 


302,688 
19.577 


322.265 


50,448 


Incurred and pending payments subtotal: 




1,982,043 




Up to 16 additional retirement pay-outs 

Balance subtotal- 


267.127 


267.127 


16,695 


Grand total- 




$2,249,392 





Comments: 1. Ms. Christine Ragan of the Fire Department advises that, as 

of February 16, 2001, the Fire Department's FY 2000-2001 
General Fund expenditures for retirement pay-outs were 
$1,405,836 for 40 retirement pay-outs, at an average cost of 
approximately $35,146 per retired employee. In addition, the 
Fire Department has expended $253,942 on retroactive salary 
pay-outs related to (a) 13 employees who had retired in FY 1999- 
2000, (b) two deaths, (c) three resignations, (d) two automatic 
resignations 1 , (e) two separations 2 , and (f) one dismissal. 

The pay-outs incurred as of February 16, 2001 total $1,659,778, 
or approximately 73.8 percent of the total budget of $2,249,392 
for retroactive salary pay-outs. The unreserved portion of the 
revised FY 2000-2001 budget for retroactive salaries is 
$1,499,392 ($2,249,392 less the subject reserve of $750,000). 
Year-to-date expenditures of $1,659,778 are $160,386 more than 
the currently available unreserved funds of $1,499,392. 



1 Absence without leave for five or more days is considered an automatic resignation per Civil 
Service Rule 322. 

2 "Separations" is a general category per Civil Service Rule 322 comprising resignations, automatic 
resignations, and dismissals. A notice is sent to the employee det ailin g the specific reason(s) for 
termination. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

22 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 






2. The Fire Department has expended $253,942 for vested pay- 
outs related to accumulated unused (a) sick leave, vacation, and 
compensatory time for 13 retirements in FY 1999-2000, (b) two 
deaths, (c) three resignations, (d) two automatic resignations, (e) 
two separations, and (f) one dismissal. Of this amount, 
$193,462, or approximately 76.2 percent, funded the 
accumulated unused vested sick leave, vacation and 
compensatory time payments related to 13 retirements which 
occurred in late FY 1999-2000. A delay between an employee's 
retirement date and the Fire Department's issuance of a check 
for vested sick leave and vacation pay is routine, and can take 
between one and two months, according to Ms. Ragan. Ms. 
Ragan states that the Controller's Office charges all vested pay- 
outs related to employees leaving City service to the retroactive 
salaries account. 

In addition, the Fire Department is expecting to expend $19,577 
on (a) the correction of a prior pay-out, due to the use of the 
wrong rate of pay in calculating that pay-out, and (b) a 
resignation of an employee. 

3. The Fire Department is anticipating up to an additional 22 
retirement pay-outs to be made during FY 2000-2001. Six of 
these retirements are already pending at a total cost of 
$302,688, or $50,448 per retired employee 3 . As shown in the 
table above, a balance of $267,127 is available to cover the costs 
of the remaining potential 16 retirements 4 (22 less 6 pending). 
This would only provide an average of $16,695 per pay-out. Ms. 
Ragan also notes that the recent death of a Fire Department 
staff member will also activate a pay-out from the retroactive 
salary budget. 



3 A Classification H-22 Lieutenant retired on December 30, 2000 ($75,387), a Classification H-30 
Captain retired on January 31, 2001 ($56,285), a Classification H-l Paramedic retired on February 
3, 2001 ($14,855), a Classification H-30 Captain retired on February 22, 2001 ($52,824), a 
Classification H-2 Firefighter retired on March 1, 2001 ($17,616), and a Classification H-30 Captain 
retired on March 17, 2001 ($85,721) for total costs of $302,608. 

4 Four retired in March of 2001, four retired in April of 2001, five are expected to retire between 
May 5-26, 2001, and three are expected to retire on June 30, 2001. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

23 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

4. Although the Fire Department is estimating that potential 
retirements during the remainder of the current Fiscal Year 
could result in expenditures that may exceed the budget for such 
retirement pay-outs, the department does not anticipate a need 
for a supplemental appropriation for such expenditures at this 
time. 

5. The Budget Analyst notes that, 'as stated above, a delay 
between an employee's retirement date and the Fire 
Department's issuance of a check for vested accumulated unused 
sick leave, vacation time and compensatory time is routine, and 
can take between one and two months. Therefore, some of the 
anticipated expenditures for such pay-outs may be charged to 
the FY 2001-2002 budget, further alleviating the potential need 
for additional funds for retirement pay-outs. 

6. As shown in the table above, the Fire Department has fully 
accounted for its FY 2000-2001 budget of $2,249,392, including 
the subject requested reserved funds of $750,000, for retirement 
pay-outs and other pay-outs including accumulated unused sick 
leave, vacation and compensatory time. This $750,000 request is 
therefore adequately justified. 

Recommendation: Approve the proposed release of reserved funds. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

24 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Items 5 and 6 - Files 01-0520 and 01-0521 



Department: 
Items: 



Amount: 
Source of Funds: 



Descriptions: 



Department of City Planning 

File 01-0520 : Ordinance appropriating $1,979,143 of 
surplus City Planning Department fee revenue to fund: 
(a) land use studies and environmental reviews in the 
South of Market (SOMA) and Mission areas to be 
conducted by outside consulting firms, (b) implementation 
of continued neighborhood planning measures in Balboa 
Park to be conducted by outside consulting firms, (c) the 
retention of outside consulting firms to develop computer- 
aided architectural presentations of large developments, 
and, (d) the creation of four new positions in the City 
Planning Department. 

File 01-0521 : Ordinance amending the Annual Salary 
Ordinance for Fiscal Year 2000-2001 (Ordinance No. 181- 
00) reflecting the creation of four new positions in the City 
Panning Department. 

$1,979,143 

Surplus City Planning Department fee revenue for Fiscal 
Year 2000-2001 from the Downtown Control Exception 
Fee, the Environmental Review Fee and the Annual Limit 
Competition Fee (See Comment No. 1 below). Attachment 
III, provided by the Planning Department, explains the 
nature of these fees. 

File 01-0520 : 

The proposed ordinance would approve a $1,979,143 
supplemental appropriation of surplus City Planning 
Department fee revenue, including $1,900,000 for outside 
consulting contracts and $79,143 for four new positions, to 
fund the Department of City Planning (Planning 
Department) for: (a) land use studies and environmental 
reviews in the South of Market (SOMA) and Mission 
areas to be conducted by outside consulting firms, (b) 
continued neighborhood planning measures in Balboa 
Park to be conducted by outside consulting firms, (c) the 
retention of outside consulting firms to develop computer- 
aided architectural presentations of large developments, 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

25 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



and, (d) the creation of four new positions in the City 
Planning Department, including three permanent 
positions and one exempt Special Assistant position, as 
discussed further below. 

Mr. Costolino Hogan of the Planning Department advises 
that the proposed supplemental appropriation would fund 
planning studies, which would form the basis for 
proposals to replace existing interim zoning controls in 
the South of Market (SOMA) and Mission areas with 
permanent zoning controls. Mr. Hogan advises that the 
interim zoning controls were first implemented in August 
of 1999 and are set to expire in August of 2001. Such 
proposals for permanent zoning controls would be 
recommended by Planning Department staff and would 
eventually be subject to approval by the Planning 
Commission and the Board of Supervisors. Mr. Hogan 
advises that the planning studies would incorporate 
analyses of land use, transportation, urban design and 
the real estate market. Mr. Hogan advises that the 
proposed supplemental appropriation would also expand 
planning studies the Planning Department is currently 
completing on the Balboa Park area. 

The proposed supplemental appropriation would allow the 
Planning Department to expand existing consulting 
contracts to complete neighborhood planning studies for 
the South of Market (SOMA) and Mission areas, as well 
as expand work currently being completed on the Balboa 
Park area. The Planning Department selected these 
neighborhoods in order to address the significant growth 
each has experienced in recent years and in response to 
concerns voiced by San Francisco residents to the 
Planning Department about such growth, according to 
Mr. Hogan. 

South of Market (SOMA) and Mission Areas 
($1,500.000) & Neighborhood Planning Measures in 
Balboa Park ($300,000). for a total of $1.800.000 

According to Mr. David Alumbaugh of the Planning 
Department, the Planning Department is requesting a 
total of $1,800,000 to fund one new consulting contract 
and to modify four existing consulting contracts to expand 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

26 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



land use studies of Balboa Park ($300,000) and to provide 
land use studies for the South of Market (SOMA) and 
Mission areas ($1,500,000). However, Mr. Hogan advises 
that the Planning Department may undergo additional 
Request for Proposal processes, instead of expanding 
existing consulting contracts, if the existing outside 
consulting firms do not have the capacity to complete the 
additional work. Mr. Alumbaugh advises that of the 
$1,500,000, approximately $750,000 will be used for 
SOMA and $750,000 will be used for the Mission area. 
The Planning Department will use the information gained 
from these studies to guide future policy and decision- 
making, according to Mr. Alumbaugh. 

The Planning Department proposes to expand existing 
contracts in a total amount of $1,800,000 as follows: 

a) Public Outreach ($200.000) : On April 4 2000, the 
Planning Department selected O'Rorke Public Relations, 
through a Request for Proposals (RFP) process, for a 
contract in the amount of $250,000 to assist the 
Department in establishing a community planning 
process and conducting public outreach for the Planning 
Department's Better Neighborhoods Program, initiated in 
1999. The proposed supplemental appropriation would 
provide an additional $200,000 to expand the existing 
contract of $250,000 with O'Rorke Public Relations, for a 
total contract amount of $450,000. Mr. Alumbaugh 
advises the expanded contract would allow O'Rorke Public 
Relations to work with Planning Department staff and 
community members in the SOMA and Mission areas to 
develop and conduct a community-based, public planning 
process that ensures the participation of the various 
communities in the SOMA and Mission areas. Mr. 
Alumbaugh advises that O'Rorke Public Relations 
completed its existing $250,000 contract with the City in 
April of 2001. If the subject supplemental appropriation 
were approved, O'Rorke Public Relations would be 
expected to complete the expanded contract by July of 
2003, according to Mr. Alumbaugh. 

b) Urban Design ($540.000) : On September 28, 2000, the 
Planning Department selected EDAW, Inc., through an 
RFP process, to complete urban design, planning and 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Geographic Information System (GIS) services for the 
development of the Balboa Park area for a contract 
amount of $250,000. The proposed supplemental 
appropriation would provide an additional $540,000 to 
expand the existing $250,000 contract with EDAW, Inc., 
for a total contract amount of $790,000. Mr. Alumbaugh 
advises the expanded contract would allow EDAW, Inc to 
expand its work in the Balboa Park area ($140,000) and 
complete urban design, planning and Geographic 
Information System (GIS) services for the SOMA and 
Mission Areas ($400,000). Mr. Alumbaugh advises that 
EDAW, Inc. is expected to complete its existing contract 
with the City by July of 2001. If the subject supplemental 
appropriation were approved, EDAW, Inc would be 
expected to complete the expanded contract by July of 
2003, according to Mr. Alumbaugh. 

c) Transportation Planning ($300,000) : On September 28, 

2000, the Planning Department selected Nelson/Nygaard, 
through an RFP process, to complete transportation 
planning for the Balboa Park area, as well as for other 
neighborhoods under the Better Neighborhoods Program, 
for a contract amount of $400,000. Such transportation 
planning includes the development of public transit, 
pedestrian and traffic plans. The proposed supplemental 
appropriation would provide an additional $300,000 to 
expand the existing $400,000 contract with 
Nelson/Nygaard, for a total contract amount of $700,000. 
Mr. Alumbaugh advises that the expanded contract would 
allow Nelson/Nygaard to expand its work in the Balboa 
Park area ($100,000) and to provide transportation 
planning for the SOMA and Mission areas ($200,000). Mr. 
Alumbaugh advises that Nelson/Nygaard is expected to 
complete its existing contract with the City by October of 

2001. If the subject supplemental appropriation were 
approved, Nelson/Nygaard would be expected to complete 
the expanded contract by July of 2003, according to Mr. 
Alumbaugh. 

d) Economic and Real Estate Analysis ($260,000) : On 
September 28, 2000 the Planning Department selected 
Strategic Economics through a Request for Proposals 
(RFP) process to complete economic and real estate 
planning for the Balboa Park area, for a contract amount 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

28 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



of $250,000. The proposed supplemental appropriation 
would provide an additional $260,000 to expand the 
existing $250,000 contract with Strategic Economics, for a 
total contract amount of $510,000. Mr. Alumbaugh 
advises the expanded contract would allow Strategic 
Economics to expand its work on the Balboa Park area 
($60,000) and to provide economic and real estate 
planning for the SOMA and Mission areas ($200,000). Mr. 
Alumbaugh advises that Strategic Economics is expected 
to complete its existing contract with the City by July of 
2001. If the subject supplemental appropriation were 
approved, Strategic Economics would be expected to 
complete the expanded contract by July of 2003, according 
to Mr. Alumbaugh. 

e) Environmental Planning ($500,000) : Mr. Alumbaugh 
advises that the Planning Department has not yet 
selected a consultant to complete the Environmental 
Planning in the SOMA and Mission areas (See Comment 
No. 5). An amount of $500,000 is being requested for this 
project. 

Attachment II, provided by the Planning Department, 
describes in further detail each of the existing contracts 
and the proposed expansion of such contracts. Mr. 
Alumbaugh advises that the Planning Department does 
not have sufficient staff to complete such long-term 
neighborhood planning studies with City employees. 

Contract for Architectural Presentations ($100.000) 

The proposed supplemental appropriation would provide 
$100,000 to retain outside consulting firms to produce 
computer-aided three dimensional (3-D) architectural 
presentations that the Planning Department would be 
able to use for detailed analysis of large-scale 
development projects. Mr. Hogan advises the Planning 
Department would use such 3-D presentations to provide 
the Planning Commission and the public with visual 
representations of how larger projects will look and affect 
their surrounding area. Mr. Hogan advises that the 
Planning Department does not plan to issue an RFP to 
select firms to provide such computer services to the 
Planning Department. Instead, the Planning Department 
plans to use the subject $100,000 for a trial period of one 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

29 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



year, during which time the Planning Department would 
select a variety of firms on a sole source basis to complete 
different computer demonstration projects, ranging from 
$5,000 to $9,000 each at a total estimated cost of $100,000 
(See Comment No. 7). Mr. Hogan advises that such a trial 
period would allow the Planning Department to explore 
the different forms of technology available, as well as 
determine which Planning Department projects would 
most benefit from computer demonstrations. 

Creation of Four New Positions ($79.143) 

The proposed supplemental appropriation would provide 
$79,143 (File 01-0520) to fund four new Planning 
Department positions, for the period from April 1, 2001 
through June 30, 2001, to be established by the proposed 
ordinance amending the Annual Salary Ordinance (File 
01-0521), as discussed below. 

File 01-0521 : 

The proposed amendment to the Annual Salary 
Ordinance would create the following four new positions 
in the Planning Department. 



No. of 
FTE 

Posit- 
ions 


Class 


Title 


Step 1 
Biweekly 
(Annual) 


Step 5 
Biweekly 
(Annual) 


1.0 


1823 


Sr. Administrative Analyst 


$2,194 
(57,044) 


$2,666 
(69,316) 


1.0 


5298 


Environmental Planner III 


2,209 
(57,434) 


2,679 
(69,654) 


1.0 


5291 


Planner III 


2,209 
(57,434) 


2,679 
(69,654) 


1.0 


1370 


Special Assistant 11 


2,226 
(57,876) 


2,706 
(70,356) 


4.0 




Total Annual Salary Costs 


$229,788 


$278,980 




Annual Mandatory Fringe Benefits 
(@ 25 percent) 


57,447 


69,745 


4.0 


Total Annual Costs 


$287,235 


$348,725 



As shown in the above table, the annual cost of hiring the 
four proposed new positions would range from $287,235 
(Step 1) to $348,725 (Step 5), including Salaries and 
Mandatory Fringe Benefits. Attachment I, provided by 



BOAJRD OF SUPERVISORS 
BUDGET ANALYST 

30 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



the Planning Department, contains a job description and 
justification for each of the four proposed new positions. 
In summary, according to the Planning Department, 
three of the four proposed new positions (1823 Senior 
Administrative Analyst, Environmental Planner III, and 
Planner III) are needed to support the proposed expanded 
neighborhood planning efforts discussed above. 

The Planning Department is requesting the fourth 
proposed new position (1370 Special Assistant 11) to serve 
as an aide to the Director of Planning and the Zoning 
Administrator, by serving as the Planning Department's 
liaison to the Board of Supervisors. As shown in 
Attachment I, the Planning Department states that the 
"...new Board of Supervisors based on district elections 
has now created a climate where legislators regularly 
expect reliable and timely communication in regard to 
complex land issues in very specific parts of the City." The 
proposed new 1370 Special Assistant 11 would represent 
the Planning Department at Board of Supervisors 
meetings and committee hearings, as well as be available 
to address specific meetings and requests from the Board 
of Supervisors, as stated in Attachment I. 

According to Mr. Hogan, the Director of Planning and the 
Zoning Administrator have been attending all of the 
necessary Board of Supervisors meeting and hearings 
themselves, as well as overseeing the Planning 
Department's response to Board of Supervisors' requests. 
As shown in Attachment I, the Planning Department 
states that spending such time responding to Board of 
Supervisors requests has reduced the amount of time the 
Planning Director and the Zoning Administrator have 
available to oversee the implementation of Planning 
Department policies. Attachment I also states that the 
Planning Department is requesting a 1370 Special 
Assistant 11 position, as opposed to using an existing 
Civil Service classification, because the Planning 
Department has not been able to find a permanent Civil 
Service classification that "...includes in its list of duties 
the responsibilities outlined above, namely direct 
assistance to top management as well as standing as a 
liaison to the Board of Supervisors." (See Comment No. 4). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Budget: 



A budget for the $1,979,143 supplemental appropriation, 
for the period from April 1, 2001 through June 30, 2001, is 
as follows: 



Expense 


Amount 


Personnel (based on the Fourth Quarter of FY 2000-2001) 




1823 Sr. Administrative Analyst 


$13,433 


5298 Environmental Planner III 


17,340 


5291 Planner III 


17,340 


1370 Special Assistant 11 (See Comment No. 4) 


15,200 


Subtotal Salaries 


$63,313 


Fringe Benefits (@ approximately 25 percent of Salaries) 


15,830 


Subtotal Personnel 


$79,143 


Expanded Contracts for Neighborhood Planning 




SOMA & Mission Areas 




Public Outreach 




Professional Fees: 1,500 hours @ $100/hr 


150,000 


Expenses (33. 3 percent of fees - See Comment No. 8) 


50.000 


Subtotal Public Involvement 


$200,000 


Urban Design 




Professional Fees: 3,250 hours @ $100/hr, 500 hours @ $90/hr 


370,000 


Expenses (8.1 percent of fees - See Comment No. 8) 


30.000 


Subtotal Urban Design 


$400,000 


Transportation Plannine 




Professional Fees: 1,800 hours @ $100/hr 


180,000 


Expenses (11.1 percent of fees — See Comment No. 8) 


20.000 


Subtotal Transportation Planning 


$200,000 


Economic & Real Estate Analysis 




Professional Fees: 1,850 hours @ $100/hr 


185,000 


Expenses (8.1 percent of fees - See Comment No. 8) 


15.000 


Subtotal Economic & Real Estate Analysis 


$200,000 


Environmental Planning 




(Contractor not yet selected - See Comment No. 5) 


500.000 


Subtotal SOMA & Mission Areas 


$1,500,000 


Balboa Park 




Urban Design 




Professional Fees: 920 hours @ $100/hr, 360 hours @ $90/hr 


124,400 


Expenses (12.5 percent of fees - See Comment No. 8) 


15.600 


Subtotal Urban Design 


$140,000 


Transportation Plannine 




Professional Fees: 950 hours @ $100/hr 


95,000 


Expenses (5.3 percent of fees - See Comment No. 8) 


5.000 


Subtotal Transportation Planning 


$100,000 


Economic & Real Estate Analysis 




Professional Fees: 585 hours @ $100/hr 


58,500 


Expenses (2.6 percent of fees - See Comment No. 8) 


1,500 


Subtotal Economic & Real Estate Analysis 


$60,000 


Subtotal Balboa Park 


$300,000 


Subtotal Neighborhood Planning Contracts 


$1,800,000 


Contracts for Computer Architectural Presentations (See Comment No. 7) 


100,000 


Total Proposed Supplemental Appropriation 


$1,979,143 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

32 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Comments: 1. As stated above, the Planning Department plans to 

fund the proposed supplemental appropriation of 
$1,979,143 with surplus City Planning Department fee 
revenue from the Downtown Control Exception Fee, the 
Environmental Review Fee and the Annual Limit 
Competition Fee. The Planning Department included in 
its Fiscal Year 2000-2001 budget estimated City Planning 
Department fee revenue of $7,696,372. According to Mr. 
Matthew Hymel of the Controller's Office, the Planning 
Department is now estimated to realize approximately 
$10,000,000 in City Planning Department fee revenues 
for Fiscal Year 2000-2001, which is $2,303,628, or 29.9 
percent, more than the previously budgeted amount of 
$7,696,372. Mr. Hogan advises that the Planning 
Department is projected to earn approximately 29.9 
percent more than originally budgeted for revenues due to 
a variety of large-scale developments generating 
additional Planning Department fee revenues. Mr. 
Hymel advises that the Controller's Office has determined 
that the Planning Department will likely continue to 
realize such additional City Planning Department fee 
revenues in future years. 

2. The Budget Analyst questions why the Planning 
Department is requesting the proposed supplemental 
appropriation in May of 2001, or one month before the 
Board of Supervisors will begin its Year 2001-2002 budget 
review process. Mr. Hogan advises that the Planning 
Department first submitted a request to the Mayor's 
Office for the proposed supplemental appropriation on 
February 23, 2001, and the subject request was 
introduced to the Board of Supervisors on April 2, 2001. 
Nevertheless, the Budget Analyst notes that this request 
is now being considered on May 9, 2001, one month prior 
to the start of the Fiscal Year 2001-2002 budget review by 
the Finance Committee. According to Ms. Erin McGrath, 
of the Mayor's Budget Office, the Mayor's Office received 
a request from the Planning Department to fund unmet, 
new and growing planning needs, in conjunction with 
projections included in the Controller's Fiscal Year 2000- 
2001 six-month Budget Status Report, issued February 7, 
2001, which identified additional Planning Commission 
revenues. Ms. McGrath states: "The needs identified in 
the supplemental have been identified through Planning 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

33 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Commission meetings, input by the new members of the 
Board of Supervisors, and other means such as planning 
staff attendance at community meetings. Waiting for the 
budget process would mean that the Department would 
have to wait until September and October to address 
these pressing City needs, which seems like an 
unnecessary delay, given that this funding that is 
available right now and is specifically designated for 
planning uses." 

3. Mr. Hogan advises that the Planning Department plans 
to hire the proposed four new positions by May 31, 2001. 
Given the proximity of this hiring date to the annual 
budget review process in June of 2001 for Fiscal Year 
2001-2002, and despite the fact that the new positions 
would be funded with Planning Department fee revenues 
and not the General Fund, the Budget Analyst 
recommends disapproval of three of the four proposed 
positions (1823 Senior Administrative Analyst, 
Environmental Planner III, and Planner III) so that these 
three proposed new positions may be considered within 
the context of the Planning Department's entire budget 
request for Fiscal Year 2001-2002. The budget includes 
both General Fund and fee revenues. As a result, the 
proposed supplemental appropriation should be reduced 
by $60,143 (including $48,113 in Salaries and $12,030 in 
Mandatory Fringe Benefits). 

4. The Budget Analyst does not consider the Planning 
Department's request for the fourth new position, a 1370 
Special Assistant 11, to be sufficiently justified. 
Furthermore, the Planning Department failed to request 
the required approval of the proposed new Special 
Assistant position from the Department of Human 
Resources (DHR) as either an exempt or a provisional 
position. Therefore, the Budget Analyst recommends 
disapproval of the proposed new 1370 Special Assistant 
11 position. As a result, the proposed supplemental 
appropriation should be reduced by an additional $19,000 
(including $15,200 in Salaries and $3,800 in Mandatory 
Fringe Benefits). On an annual basis, this would reduce 
the Planning Department's request by an amount ranging 
from $60,102 (Step 1) to $73,062 (Step 5). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

34 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



5. The Budget Analyst notes that the Planning 
Department has not yet selected a firm to complete the 
Environmental Planning in the SOMA and Mission Areas. 
Therefore, the proposed $500,000 budgeted for 
Environmental Planning should be placed on reserve, 
pending selection of a contractor and submission to the 
Finance Committee of budget details, including the 
estimated number of hours and the hourly rates. Mr. 
Hogan advises that the Planning Department plans to 
undergo a Request for Proposals (RFP) process and select 
a contractor by approximately the end of June of 2001. 

6. In Attachment rV, provided by the Planning 
Department, the Planning Department explains why 
during the RFP process the Planning Department 
selected three firms with existing contracts with the 
Planning Department, which the Planning Department is 
now proposing to expand. The Planning Department is 
now proposing to expand such existing contracts with the 
subject supplemental appropriation. The three firms 
include EDAW, Inc., Nelson/Nygarrd, and Strategic 
Economics. Additionally, according to Mr. Hogan, the 
Planning Department selected O'Rorke Public Relations 
on April 4, 2000 through a competitive RFP process. Mr. 
Hogan advises that a total of two firms submitted 
proposals for the Public Relations contract, including 
O'Rorke Public Relations. Mr. Hogan advises that the 
Planning Department selected O'Rorke Public Relations 
based on stronger capabilities in public outreach and 
public relations, its understanding of the proper role 
between public planners and the community, its 
understanding of the need for an "advertising campaign" 
for the program, and its greater understanding of the 
need for planning coupled with effective public outreach. 
As previously noted, the contract with O'Rorke Public 
Relations would also be expanded. 

7. As stated previously, the proposed supplemental 
appropriation would provide $100,000 to retain firms to 
produce computer-aided three dimensional (3-D) 
architectural presentations that the Planning 
Department would be able to use for more detailed 
analysis of large-scale development projects. However, 
Mr. Hogan advises that the Planning Department does 
not plan to issue an RFP to select firms to provide such 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

computer services to the Planning Department. Instead, 
the Planning Department plans to select consulting firms 
on a sole source basis in order to allow the Planning 
Department to explore the different forms of technology 
available, as well as determine which Planning 
Department projects would most benefit from computer 
demonstrations. The Budget Analyst recommends that 
the $100,000 to be used to hire computer consulting firms 
to create 3-D architectural presentations be placed on 
reserve, pending selection of contractors and submission 
to the Finance Committee of budget details, including the 
estimated number of hours and the hourly rates. 

8. Regarding the estimated consultant's expenses, which, 
as shown in the above budget, range from 2.6 percent to 
33.3 percent of professional fees, Mr. Alumbaugh advises 
that: 

a) Expenses include items such as printing, postage, 
graphic design, reproduction, reprographics, mail- 
house services, courier service and delivery services, 
which are not covered by standard labor billing rates. 
Expense estimates are taken from the percentage of 
expenses as compared to total contract amount in the 
existing contracts. 

b) Expenses do not include travel. All firms are local, so 
travel costs are minimal. Travel costs are borne by 
each consultant as part of the standard overhead costs 
included in its labor billing rates. 

c) The variation in expense percentages is due to the 
different tasks each of the consultants is to perform. 
As an example, the public involvement consultant 
contract must cover postage, mail-house services, 
address services, reproduction, graphic design, and the 
like. 

Recommendations: 1. Disapprove the request for three new positions of 1823 

Senior Administrative Analyst, Environmental Planner 
III, and Planner III so that these three proposed new 
positions may be considered within the context of the 
Planning Department's entire budget request for Fiscal 
Year 2001-2002. As a result, reduce the proposed 
supplemental appropriation by $60,143 (including 

s 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

36 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



$48,113 in Salaries and $12,030 in Mandatory Fringe 
Benefits), in accordance with Comment No. 3 above. 

2. Disapprove the request for a new 1370 Special 
Assistant 11 due to insufficient justification. As a result, 
reduce the proposed supplemental appropriation by an 
additional an additional $19,000 (including $15,200 in 
Salaries and $3,800 in Mandatory Fringe Benefits), in 
accordance with Comment No. 4 above. 

3. Reserve the $500,000 budgeted for Environmental 
Planning in the SOMA and Mission Areas, pending 
selection of a contractor and submission to the Finance 
Committee of budget details, including the estimated 
number of hours and the hourly rates, in accordance with 
Comment No. 5 above. 






4. Reserve the $100,000 budgeted to hire firms to create 
3-D architectural presentations, pending selection of 
contractors and submission of budget details to the 
Finance Committee, including the estimated number of 
hours and the hourly rates, in accordance with Comment 
No. 7 above. 

5. In summary, implementation of the Budget Analyst's 
recommendations would reduce this supplemental 
appropriation request by $73,143, from $1,979,143 to 
$1,900,000. The proposed ordinance should be amended to 
make the following reductions: 









Recommended 




Line 


Item 


Requested 


Revised 


Increase 


No. 




Amount 


Amount 


(Decrease) 


15 


Permanent Salaries 










(for the Planner III) 


$17,340 





($17,340) 


17 


Fringe Benefits 


4,336 





(4,336) 


19 


Permanent Salaries 










(for the Environmental Planner III) 


17,340 





(17,340) 


20 


Fringe Benefits 


4,336 





(4,336) 


22 


Permanent Salaries 
(for the Special Assistant 13 and 










Sr. Administrative Analyst) 


28,633 





(28,633) 


23 


Fringe Benefits 


7,158 





(7,158) 




Total 


$79,143 





($79,143) 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

37 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



6. Approval of the supplemental appropriation (File 01- 
0520), as reduced to a total of $1,900,000 (requested 
supplemental appropriation of $1,979,143 less Salaries 
and Mandatory Fringe Benefits of $79,143), is a policy 
decision for the Board of Supervisors. 

7. Disapprove the proposed amendment to the Annual 
Salary Ordinance (File 01-0521) to establish four new 
Planning Department positions. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

38 




Attachment I 

PLANNING DEPARTMENT Page ' oT ~^ 

C ity and County of San Francisco 1660 Mission Street, Suite 500 San Fran cisco, CA 94103-2414 

(415)555-6378 planning commission administration current planninc/zonh^ 



FAX 558-6409 



FAX 538-6409 



LONG RANGE PLANNING 
FAX: 558-6426 



MEMORANDUM 



DATE: 


April 18, 2001 


TO: 


Emilie Neuman 

Budget Analyst Office 

San Francisco Board of Supervisors 


FROM: 


Gerald Green, Director 

San Francisco Planning Department 


RE: 


Increase Position Authority to result in Sudd 
2001 



2000- 



BACKGKOTTAm 

In November of 2000 the citizens of San Francisco voted on several DmrwriHn , , 
governmental management. Of these measures two in particular SSSetf S 

v ™ tne roie of the San Francisco Planning Department as the aoenrv tw , 

prudent use of land. y^^cni as me agency that manages the 

Neither proposition passed. However the issues the measures attemoted to aHH™. • ^ 

Department has submitted to the Mayor's Office of I^« S^^^- ^ 
authorize appropriations with the strict purpose of addressing the e lZ u^J ? ° 

~owmg is justification for the augmentation in Department ^SgSKS 

ISSUE 

The Department now proposes administering advance planning efforts to reolace exm.™ ;«♦ • 
zoning controls, which expire August 2001. These controls will affect area! mat Z * ? 

sl'T 1 2 T ng diStnCtS md » f0CUS£d in * e So ^ ° f Market area SOmT) MssTon Set" 

£3^&r Md t Pacific Bel1 Park - Deveioping these S^J?SM 

smdts zSLelT" 3 PUbhC ° Utreach . and COnductin S -onomic and urban desism 
adonteH ,7f f ema r tlves must receive appropnate environmental reviews before the V can be 
adopted as final policy for future growth of San Francisco. y 

^ro^^s presentIy beins imp!emented by the Departmem - the *»- ^ 



39 



Page Z or 5 



ITEM 

The Department is requesting augmentation in staffing to begin in the last quarter of the 2000- 
2001 Fiscal Year. 

Three positions will be directly assigned to implement the new Department work assignments 
described above. 

The long range planning work items described will mirror community based planning efforts the 
Department is now implementing in the Hayes Valley and Central Waterfront area of San 
Francisco through the "Better Neighborhood 2002" program. 

This program was originally organized during the development of the FY 1999-2000 budget to 
devote six (6) full time equivalent (FIE) positions, five planners and one clerical person and 
$900,000 in contract funding annually toward completing land-use plans for two neighborhoods 
in San Francisco. 

In the past months the Department has received request from various neighborhoods groups to 
implement specific area studies in other areas. Some work has begun in Balboa Park. The 
Balboa Park neighborhood was chosen because the Department felt that the area had 
transportation nodes that were under utilized. The studies in Balboa Park were initiated with a 
$177,000 grant provided by the Federal Highway Adrninistration in FY1999-2000. For FY 2000- 
2001 former Supervisor Amos Brown provided $300,000 to continue the studies in the area. 
This funding has paid consultants to conduct the various community outreach and analysis in the 
area. To date no new staff has been added to deal with expansion of the "Better Neighborhoods 
2002" program into Balboa Park. 

The following positions are necessary because the expansion of the "Better Neighborhoods 
2002" program beyond its initial scope has taken away any marginal staff time that could be 
devoted to managing the much larger land use studies that will be needed to replace the interim 
zoning controls in the industrial areas of the eastern portion of the City and County. 

5291, Planner m : 

The Citywide Policy Unit of the Department will need an additional Planner HI, 5291 
position to oversee the land use, and economic studies that will be conducted in the 
SOMA and Mission District that will provide background data. After the initial studies 
then this person will be involve in creating the land use document that must be approved 
by the Planning Commission and adopted by the Board of Supervisors. 

5298, Environmental Planner HI 

The Department's Major Environmental Analysis Unit of the Department will need an 
additional Environmental Planner III to manage the subsequent series of large-scale 
environmental reviews. The breakdowns of the existing environmental review positions 
in the Department are as follows: 

5298 - Planner EI, Environmental Review 7 FTE 

5299 - Planner IV, Environmental Review 2 FTE 



40 



Attachment I 
Page 3 of 5 



1823, Senior Administrative Analyst/Contracts Coordinator 

' The process of retaining the necessary consultants to carry on the all the studies that 
provide background for the "Better Neighborhood 2002" program took approximately 
nine (9) months and monopolized most of the time of the planners who now manage 
.those contracts. These planners are now busy implementing the program and cannot 
devote energies toward proctoring amended contracts through the City's procurement 
process that mandates approval from the Human Rights Commission, the Purchasing 
Department, the City Attorney's Office, the Controller's Office and the Department of 
Human Resources. The Department proposes that an 1823, Senior Administrative 
Analyst position be added to its Adrninistrative Unit to be responsible for these duties. 

The Department presently does have one (1) Senior Administrative Analyst on staff. 
That person is the Department's Fiscal Officer whose time is spent creatine and 
negotiating the Department's annual spending plan and work program with the Mayor's 
Office and Board of Supervisor. This responsibility is addressed while daily monitoring 
and managing the Department's earnings and spending. 

An additional position will aid senior staff in dealing with citywide land-use issues and general 
affairs before the Board of Supervisors. The position will also be added to the Department's 
Administration Unit ' 

1370, Special Assistant 

A new Board of Supervisors based on district elections has now created a climate where 
legislators regularly expect reliable and timely communication in regard to complex land 
use issues in very specific parts of the City. To see to it that this happens, a 1370 Special 
Assistant position is needed to aid the Director and the Zoning Administrator by serving 
as the Department's liaison to the Board of Supervisors. This staff person when called 
upon will stand in for both the Director and the Zoning Administrator at Board of 
Supervisor meetings and committee hearing. Also the staff person will represent the 
Director at various community meetings citywide. 

Two main issues are being address with this action. The first being that each week the 
Director and the Zoning Administrator have been called to spend indefinite and varying 
amounts of time in Board of Supervisor hearings. Time that sometime is needed to direct 
staff with implementing the policies of the Department. The other issue regards the 
avoidance of scheduling conflicts. One example being that now the Board of Supervisor 
Land Use Committee meets at the same time as the Planning Commission. It is 
impossible for the Director or the Zoning Administrator to appear before the Land Use 
Committee if called upon. 

The Department is proposing using a Special Assistant position because a permanent 
classification has not been found that includes in its list of duties the responsibilities 
outlined above, namely direct assistance to top management as well as standing as a 
liaison to the Board of Supervisors. The Department of Human Resources has not 



41 



Attachment: i 
Page 4 of. 5 



reviewed this proposed position however the Department plans to work with DHR to 
create a permanent classification. 

The Department presently has only one (1) Special Assistant position in its budget. This 
is a 1375 Special Assistant XVI. The person in this position serves the dual role of 
Commission Secretary and Administrator. 



Hiring Plans 

The Department believes that if this request for position augmentation is authorized between the 
dates of April 15 and April 30 then hiring of all four positions being requested can and should 
occur before the end of the month of May. 

Expediting this process is possible due to the fact the Department will have at its disposal the use 
of established applicant list for selecting new staff. For the 1823 and 5298 positions there are 
permanent civil service list created by the Department of Human Resources that offer a large 
universe for contacting and acquiring competent staff. The Department has took the initiative to 
create an in-house 5291 list to provide. a pool of potential staff people. It stands ready to be 
accessed. With the use of these lists contacting, interviewing and hiring can be completed in 
three to four weeks. 

These requested positions would augment a total present staff of approximately ninety-eight (98) 
planners. The breakdown is as follows: 

5277 -Planner I 5.9 FTE 

5278 - Planner II 22.7 FTE 

5282 - Planner IE 2.0 FTE 

5283- Planner V 7.0 FTE 

5288 -Transit Planner n 2.0 FTE . 

5289 - Transit Planner m 2.3 FTE 

5290 - Transit Planner TV 2.0 FTE 
5291- Planner m 31.0 FTE 
5293 - Planner IV, Transportation 14.0 FTE 

5298 - Planner m, Environmental Review 7.0 FTE 

5299 - Planner IV, Environmental Review 2.0 FTE 

TOTAL 97.9 FTE 



Funding 

It has been proposed by the Mayor's Office of Finance, the Controller's Office and agreed to by 
the Planning Department, that the expenses associated with the above mention position 
augmentations and the contract funding accompanying them be paid for with projected surpluses 
earned by the Planning Department in FY 2000-2001 (See Attachment "Fiscal Year 2000-2001 
DCP Overall Earnings"). 



42 



Page 5 of 5 

The present surge in earnings being experienced by the Department can mainly be attributed to 
large-scale development occurring in the San Francisco area. The bulk of this surplus in 
revenues comes from higher than expected earnings garnered from conducting environmental 
reviews of proposed developments, reviewing submittals to San Francisco's Annual Office Limit 
Competition, and from reviewing large downtown projects (Over 50,000 sq. ft) that are 
mandated by the Planning Code to be reviewed by the Planning Commission. The line items 
reflecting these earnings are rendered in blue on the accompanying attachment. 

At the close of March, performing these three activities earned the Department $2,677,775 
approximately 32% of the Department's total revenue to that date for FY 2000-2001. The 
expectation was that these three items would only earn approximately $1,660,000 for the whole 
of FY 2000-2001. Projecting the current actual in these revenue streams shows that the 
Department can expect to earn approximately $1.8 million dollars more from these activities than 
expected. 

It is the view of the Department that this surplus is a reflection of a specific time in development 
history in San Francisco. These development projects being reviewed by the Department are the 
latest product of a building boom that San Francisco has been experiencing over the last three 
years. 

However these large-scale developments will have ongoing effects on existing municipal 
irifrastructure. Long range planning efforts for the areas surrounding these developments must 
be implemented so this growth does not in anyway diminish the overall quality of life in the City 
and County. With this min d the Department agrees wholeheartedly that surplus revenue earned 
from processing and reviewing these large-scale projects should go the cover the cost of this 
proposal. 

In the wake of surplus earnings the Department does want to address the issue of a reduction in 
its fee schedule. The Department has investigated the notion of a reduction in its overall fee 
schedule. A study was commission by the consulting firm of DMG Maximus, Inc., in the fall of 
1999. The final conclusion was that the Bay Area economy would slow sometime after FY 
2000-2001 and therefore reductions would hurt the Department's ability to cover its long term 
expenses. This lead to the relatively small change in the Department budget and fee projections 
from FY 1999-2000 to FY 2000-2001 (3 percent). 



43 



Attachment II 
rage i o± 10 



MEMORANDUM 

To: Emilie Neumann, Budget Analyst 

From: David Alumbaugh 

Date: May 3, 2001 

RE: Information Request re: Supplemental Appropriation for Balboa Park 



In response to the Board of Supervisors Budget Analyst's request, the Planning 
Department believes that the planning work proposed for consultants for the Balboa Park 
planning work, which is covered under the supplemental appropriation, would be 
undertaken most expeditiously if the Department expanded existing contracts of the 
consultants now under contract for Balboa Park. 

a.) We would proposed to expand existing contracts rather than issue new RFP's 

because this is continuing work for which consultants are already under contract 
for earlier phases of the work. These firms were selected through a competitive 
process, in cooperation with the HRC. In addition, the project is under extremely 
tight deadlines that cannot be delayed without great consequence. 

b.) The following are the existing contracts to be extended: 



Contract Purpose 


Consultant 
Firm 


Date Selected 


Initial 

Contract 

Date 


Cost of 
Contract 


Transportation Planning 


Nelson/Nygaard 


9/28/2000 


10/3/2000 


$400,000 


Urban Design 


ED AW, Inc. 


9/28/2000 


10/3/2000 


$250,000 


Economics and Real 
Estate Analysis 


Strategic 
Economics 


9/28/2000 


10/3/2000 


$250,000 



c.) Neither the supplemental request nor proposed increases to contracts for Balboa 
Park are anticipated to exceed $500,000, so no approval of the Board of 
Supervisors is anticipated. 

d.) Other firms that bid for contracts in Balboa Park: 

Transportation Planning: Two pre-qualified firms were asked to bid on the 
work. Nelson/Nygaard was selected because of a more robust work scope, a more 
solid understanding of the work required to complete the project, and because it 
understood the proper role of transportation modeling and its benefits to the 
project. 



Source: City Planning Department 



44 



Attachment II 
fage 2 of 10 



Urban Design: Two pre-qualified firms were asked to bid on the work. EDAW 
was selected because of its greater depth in preparation of specific plans, its 
greater understanding of the interrelationships between urban design, 
transportation, and economics, its greater depth of experience in transit-oriented 
design and planning, and its more robust work program 

Economics: Three pre-qualified firms were asked to bid on the work. Strategic 
Economics was selected because of its stronger capabilities in regional 
economics, its depth of experience in computer aided planning and data analysis 
that matched the systems in place in the Planning Department (GIS), its greater 
understanding of the link between economic planning and urban design, and its 
more robust work program. 



Source: City Planning Department 



45 



Attachment II 
Page 3 of 10 



MEMORANDUM 



To: Emilie Neumann, Budget Analyst 

From: David Alumbaugh 

Date: May 3, 2001 

RE: Information Request #2 re: Supplemental Appropriation 



The following is the additional information you requested regarding the work covered 
under this supplemental appropriation. It is organized as follows: 

I. Balboa Park Station Supplemental Appropriation 

The following summarizes a budget-level breakdown of fees for each consultant for 
continuing the Balboa Park planning work. All amounts are subject to discussion and 
negotiation with consultant. An outline scope and fee estimate for each planning 
discipline under contract and an estimate of fee for the expanded planning work covered 
under the Balboa Park supplemental appropriation is provided on pages 3 through 8 of 
this memorandum. 

A. Balboa Park Station Area Plan Urban Design Contract Expansion: $140,000 

B. Transportation Planning Contract Expansion: 100,000 

C. Economics and Real Estate Contract Expansion: 60.000 

Total $300,000 

II. New Neighborhood Plan Supplemental Appropriation 

The following summarizes a budget-level estimate for each consultant for a standard new 
neighborhood plan. All items are subject to discussion and negotiation with consultants. 
A standard scope and fee estimate for a standard neighborhood plan is provided on pages 
9 through 1 1 of this memorandum. 

A. Public Involvement $200,000 

B. Urban Design $400,000 

C. Transportation Planning 200,000 

D. Economics and Real Estate 200,000 

E. Environmental Planning 500.000 

Total $1,500,000 



Source: City Planning Department 

46 



Attachment _$I 
Page 4 of 10 



III. Total Contract Expansions With Both Supplemental Appropriations 

If the Department were to undertake the planning work included in the supplemental 
appropriation by extending the contracts for consultants currently under contract, it would 
result in the following contract increases (all items are subject to discussion and 
negotiation with consultant): 

A. Public Involvement (O'Rorke Public Relations) $200,000 

B. Urban Design (ED AW): 540,000 

C. Transportation Planning (Nelson/Nygaard) 300,000 

D. Economics and Real Estate Analysis (Strategic Economics) 260,000 

E. Environmental Planning ("Consultant Undetermined at this Time) 500.000 

Total $1,800,000 



Source: City Planning Department 

47 



Attachment I I 
Page 5 of ID" 



I. Balboa Park Station Supplemental Appropriation 
A. Balboa Park Station Area Plan Urban Design Contract Expansion 

1 . Amount of original contract and name of firm: 
Amount: $250,000 

Name of firm: ED AW, Inc. 

2. Services/products: The urban design consultant is under contract to provide the 
following professional urban design, planning, and geographic information (GIS) 
services to the Planning Department for development of the Balboa Park Station Area 
Plan. 

A: Urban Design Services 

1. Project Startup 

2. Preliminary Conditions, Issues, And Opportunities Analysis 

3. Plan and Alternatives Conceptualization 

4. Focused Conditions, Issues, and Opportunities Analysis 

5. First Draft Plan Development 

6. Project Team Coordination 

7. Public Involvement: Three public workshops 
B. Geographic Information Services (GIS) Services 

1 . GIS Consultant Team Lead 

2. 3D Modeling Consultant Team Lead 

3. Internal Project Team Website 

4. Project Team Coordination 
Products: 

1 . Draft and Final Existing Conditions, Issues and Opportunities Technical 
Memorandum 

2. Planning and Urban Design Draft and Final Memorandum for DEIR 

3. Display graphics for public outreach 

4. Preliminary and final display and report graphics for existing conditions, 
issues and opportunities analysis 

5. Prehminary and final display and report graphics for alternative concepts 

6. Preliminary and final revised scopes of work for work tasks 

7. Planning and urban design project description for DEER. 

8. Preliminary impact analysis and mitigation for plan balancing 

9. Draft and Final Impact Analysis for DEER 

10. Preliminary and final draft plan materials 

1 1 . Preliminary and final plan controls 

12. Preliminary and final draft major infill project concepts 

13. Preliminary and final design guidelines 

14. Display and report graphics 

3. Date of expected completion: 10/2001 

4. Dollar-amount expansion of contract: $140,000 

5. Additional services: Limitations to current funding did not allow the Planning 
Department to contract for the development of building prototypes for the Balboa 

Source: City Planning Department 

48 



Attachment I I 
Page 6 of 10 



Park Transit Center improvements nor for infill buildings within the Ocean Avenue 
Neighborhood Commercial district. It also did not allow the Department to contract 
for an adequate amount of the urban design services needed to complete the project, 
for the GIS services needed to make planned changes fully understandable to the 
public, nor for attendance and participation in three of the six planned public 
workshops. 

6. Importance of services: Without this supplemental appropriation, the services 
described in #5 above will not be provided. These services are important in 
adequately exploring the planning issues in the neighborhood, in communicating the 
changes being explored to the public so that they can fully visualize and understand 
them, in supporting the economic analysis needed to understand the economic 
impacts of these changes on the neighborhood and on city agencies, in supporting the 
visual analysis needed to help the project planners and the neighborhood understand 
the visual impact of proposed changes, and in testing the feasibility of planning ideas. 

7. Estimated date of completion of expanded contract: 10/2001 

8. Budget for Balboa Park Urban Design Expanded Scope (all items are subject to 
discussion and negotiation with consultant): 

A. Building Prototypes 

325 person hours @ SlOO/hour = $32,500 

Estimated Expenses (does not include travel) 2,500 

B. Additional Urban Design Planning and Analysis 

570 person hours @ $100/hour = 57,000 

Estimated Expenses (does not include travel) 5,000 

C. Additional Geographical Information Systems Support 

360 person hours @ $90/hour = 32,400 

Estimated Expenses (does not include travel) 7,600 

D. Attend and Participate in Three Additional Public Workshops 

25 person hours @ SlOO/hour = 2,500 

Estimated Expenses (does not include travel) 500 

Total Estimated Addition to Contract S 1 40,000 



Source: City Planning Department 



49 



Attachment II 
Page 7 of 10 



B. Transportation Planning Contract Expansion 



1 . Amount of original contract and name of firm: 
Amount: 5400,000 

Name of firm: Nelson/Nygaard 

2. Services/products: The transportation planning consultant is under contract to provide 
the following professional services to the Planning Department for development of 
the transit, pedestrian, bicycle, and traffic elements of the Balboa Park Station Area 
Plan and for each of the other two neighborhood plans being prepared under the 
Better Neighborhoods program. 

1. Project Startup 

2. Preliminary Conditions, Issues, And Opportunities Analysis 

3. Plan and Alternatives Conceptualization 

4. Focused Conditions, Issues, and Opportunities Analysis 

5. Public Review Draft Plan Analysis 

6. Project Team Coordination 

7. Public Involvement: Three public workshops 
Products: 

1 . Refined work scope 

2. Project schedule 

3. Data collection plan 

4. Intersection service levels 

5. Transit routes and stops 

6. Transit accessibility indices 

7. Pedestrian and bicycle circulation issues 

8. Walkability indices 

9. Accident locations and summary 

10. Street rights-of-way 

1 1 . Parking supply and demand 

12. Opportunities memorandum 

13. Traffic trip budgets 

14. Transit trip budgets 

15. Traffic, transit, pedestrian, and bicycle circulation routes 

16. Pedestrian design guidelines 

17. Parking program and code modifications 

18. Shared parking guidelines 

19. Alternative analysis 

20. Transportation policies 

3. Date of expected completion: 10/2001 

4. Dollar-amount expansion of contract: $100,000 

5. Additional services: Limitations to current funding did not allow the Planning 
Department to contract for all work needed to understand the considerable 
transportation issues for this neighborhood, to provide modeling and other graphic 
means for the public to understand the range of proposals and their impacts, nor for 
attendance and participation in three of the six planned public workshops. 



Source: City Planning Department 

50 



Attachment II 
Page 8 of 10 



6. Importance of services: Without this supplemental appropriation, the services 
described in #5 above will not be provided. These services are important in 
adequately exploring the planning issues in the neighborhood, in communicating the 
changes being explored to the public and to city and other agencies, in supporting the 
transportation analysis needed to help the project planners, city and other agencies, 
and the neighborhood understand the transportation impacts of potential changes, and 
in testing the feasibility of transportation ideas. 

7. Estimated date of completion of expanded contract: 10/2001 

8. Budget for Transportation Planning Expanded Scope (all items are subject to 
discussion and negotiation with consultant): 

950 person hours @ SlOO/hour = $95,000 

Estimated Expenses (does not include travel) 5,000 

Total Estimated Addition to Contract $ 1 00,000 



Source: City Planning Department 

51 



Attachment II 
Page y o± 10 ~ 



Economic and Real Estate Planning Contract Expansion 



1 . Amount of original contract and name of firm: 
Amount: $250,000 

Name of firm: Strategic Economics 

2. Services/products: The economic and real estate planning consultant is under contract 
to provide the following professional services to the Planning Department for 
development of the Balboa Park Station Area Plan and for each of the other two 
neighborhood plans being prepared under the Better Neighborhoods program. 

1. Project Startup 

2. Preliminary Conditions, Issues, And Opportunities Analysis 

3. Plan and Alternatives Conceptualization 

4. Focused Conditions, Issues, and Opportunities Analysis 

5. First Draft Plan Development 

6. Project Team Coordination 

7. Public Involvement: Three public workshops 
Products: 

21. Refined relational database 

22. Refined ArcView shapefiles 

23. Update procedures for database 

24. Land use update 

25. Citywide and neighborhood demography analysis 

26. Citywide and neighborhood growth allocation 

27. Market and pro forma analysis for Balboa Park station area and Phelan/Ocean 
area 

28. Soft sites analysis 

29. Economic constraints analysis 

30. Real estate analysis of commercial and residential space 

3 1 . Advantages and constraints analysis 

32. Economic analysis of development (building) prototypes 

33. Public parcel development concepts 

34. Improvement and implementation program 

35. Prehminary and final first draft plan materials 

36. Refined work scope 

3. Date of expected completion: 10/2001 

4. Dollar-amount expansion of contract: $60,000 

5. Additional services: Limitations to current funding did not allow the Planning 
Department to contract for the detailed economic, market, and pro forma analysis 
necessary for the Balboa Park, nor for attendance and participation in three of the six 
planned public workshops. 

6. Importance of services: Without this supplemental appropriation, the services 
described in #5 above will not be provided. These services are important in 
adequately exploring the planning issues in the neighborhood, in communicating the 
changes being explored to the public and understanding their economic impacts and 
importance, in understanding the economic impacts of these changes on the 



Source: City Planning Department 

52 



Attachment H 
Page 10 of 10 



neighborhood and on city agencies, in testing the feasibility of planning ideas, nor 

attending three of the six planned neighborhood workshops. 

Estimated date of completion of expanded contract: 10/2001 

Expanded budget for Economic and Real Estate Expanded Scope (all items are 

subject to discussion and negotiation with consultant): 

585 person hours @$100/hour = $58,500 

Estimated Expenses (does not include travel) 1,500 

Total Estimated Addition to Contract $60,000 



Source: City Planning Department 

53 



Attachment III 



Date: 5/3/01 
Sender: Costolino Hogan 
To: Emilie Neumann 
Priority: Normal 
Subject: Fees 



Here are descriptions of the fees that have been picked to fund the present supplement proposal. 

Downtown Control Exceptions Fee: Varies with size of project 

Mandatory review of all downtown projects over 50,000 sq. ft. by the Planning Commission. The 
process is mandated by the Planning Code for projects of this size and scope. 

Environmental Review: Cost Based on Construction Valuations 

Analysis of the potential environmental impacts of a new development. Review is mandated by 
California Environmental Quality Act (CEQA). Projects that must receive environmental review 
are varied and the criteria is delineated in the CEQA code. 

Annual Limit Competition: Cost $15,675 per application 

Presently the Planning Code states that only 950,000 sq. ft. of office space can be built in San 
Francisco in a given year. The Annual Limit Competition allows developers the chance to apply 
and be included within that 950,000 sq. ft. 



Source: City Planning Department 



54 



At tachmen t IV 
Page 1 of 3 



II. New Neighborhood Plan Supplemental Appropriation 

A. Community-Based Neighborhood Planning Work Program and Estimate of 
Consultant Costs 

A standard neighborhood work program and estimate of consultant costs for a 
community-based planning effort for one neighborhood under the Better Neighborhoods 
program follows. Using current contract amounts as a guide, an estimated budget for each 
of five consultant teams would be as follows (all items are subject to discussion and 
negotiation with consultant): 

1. Public Outreach $200,000 

2. Urban Design 400,000 

3. Transportation Planning 200,000 

4. Economic and Real Estate Analysis 200,000 

5. Environmental Planning and Analysis 500.000 

Total Estimated Consultant Costs $1,500,000 

Neighborhood Plan Work Program 

The following is a standard work plan and consultant estimate for a standard 
work program for one community-based planning effort under the Better 
Neighborhoods Program. 

Task 1: Project Initiation 

Staff will prepare scopes of work, schedules, estimates of costs, and deliverables 
for the planning projects as a whole and for all consultant work. 

Task 2: Public Planning Process 

Staff and consultant team will work with specialists to develop and conduct a 
community-based, public planning process that ensures the involvement, 
participation, and ownership of the various communities in the vicinity to the 
planning process and to the solutions it proposes. 

Task 3: Designate Transit-Oriented Community Use Plan Area 

Staff will designate and delineate transit-oriented community plan areas, based 
upon comfortable walking distances to the station tied to distance, topography, 
boundaries, edges and other factors; existing land uses; major destinations; 
and other important features of the surrounding area. 

Task 4: Project Goals and Objectives 

Staff and consultant team will work with neighborhood groups through the 
community-based, public planning process to prepare a set of goals and 
objectives for the project and for the planning area. This work will build upon 
the goals and objectives of other planning work done or being done, where 
appropriate. Goals and objectives will serve as the foundation for the planning 
work at, and will be the basis of the project evaluation. 

Source: City Planning Department 

55 



Attachment IV 
Page 2 of 3 



Task 5: Inventory and Analysis 

Staff and consultant team will complete the inventory and analysis tasks of the 
project, including traffic analysis, transit profiles, community character 
analysis, community profiles, land use analysis, urban design analysis, soft- 
sites analysis, opportunities and constraints analysis, and circulation analysis. 

Task 6: Development Prototypes 

The urban design consultant will lead and planning department staff will assist 
in developing a set of appropriate development prototypes drawn upon 
examples of the city's successful and desirable neighborhoods, as well as upon 
recent examples of successful, sensitive development. 

Task 7: Transit-Oriented Community Use Plan: Plans, Plan Maps, 
Drawings, and Documentation 

The urban design consultant will lead and the planning department staff would 
assist in preparing a transit-oriented community use plan that addresses and 
synthesizes the issues identified in the work tasks above. 

Task 8: Implementation Program 

In coordination with and by mutual agreement with all agencies and 
implementing bodies with jurisdiction in the planning area, planning staff will 
prepare, with consultant's input and participation, an implementation program 
that documents how the transit-oriented community use plan will be 
implemented, and that clearly sets out the roles, responsibilities, actions, costs 
and time lines of each agency for implementing the plan. 

Task 9: Planning Controls. 

Staff will prepare, with consultant input, new public policies and programs, new 
planning policies where appropriate, and other techniques to achieve the 
planning goals of the project. 

Task 10: Draft Plan Report 

The planning consultant will prepare draft plan report that describes and 
illustrates all elements of the transit-oriented use plan and that documents the 
planning process. The draft plan report also will describe the project evaluation 
component of the plan and the near-term results of the process, the products, 
and outcomes of the project, if there are short-term outcomes. Staff will review 
and comment on the draft report, and will work with the consultant to agree on 
its final content and layout. 

Task 11: Environmental Review and Entitlements 

Environmental consultants will begin program-level environmental documents 
that address the environmental issues and impacts of the neighborhood plans. 

Task 12: Commission and Board Approvals 

Assist staff in presentations before commissions and boards. 

Task 13: Final Plan Report 

Source: City Planning Department 

56 



Attachment IV 
PlgI~~3oF~3" 



The planning consultant will prepare the final plan report that describes and 
illustrates all elements of the transit-oriented use plan and that documents the 
planning process. The final plan report also will describe the project evaluation 
component of the plan and the near-term results of the process, the products, 
and outcomes of the project, if there are short-term outcomes. Staff will review 
and comment on a draft of the final report, and will work with the consultant to 
agree on its final content and layout. 

Task 14: Management 

Consultant selected as prime on the consultant team will manage other 

consultant members of the team and coordinate the work of the team with staff. 

Estimated Consultant Costs 

Task 1: Project Initiation $10,000 

Task 2: Public Planning Process $200,000 

Task 3: Designate Plan Area $10,000 

Task 4: Project Goals and Objectives $10,000 

Task 5: Inventory and Analysis $200,000 

Task 6: Development Prototypes $50,000 

Task 7: Community Plan $200,000 

Task 8: Implementation Program $50,000 

Task 9: Planning Controls $25,000 

Task 10: Draft Plan Report $50,000 

Task 11: Environmental Review $500,000 

Task 12: Commission and Board Approvals $20,000 

Task 13: Final Plan Report $50,000 

Task 14: Management $125,000 

Total $1,500,000 



Source: City Planning Department 

57 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Items 7 and 8 - Files 01-0677 and 01-0678 



Departments: 



Items: 



Department of Administrative Services 
Department of Human Resources 

Item 7 -File 01-0677 

Ordinance appropriating $334,000 from the Wage and 
Health Care Accessibility Reserve to fund salaries, fringe 
benefits, materials and supplies, and professional services 
for the Office of Contract Administration, FY 2000-2001. 

Item 8 - File 01-0678 

Ordinance amending the Annual Salary Ordinance 
(Ordinance No. 181-00), reflecting the creation of 14 new 
positions in the Department of Administrative Services, 
Office of Contract Administration. 



Amount: 
Source of Funds: 

Description: 



$334,000 

General Fund Wage and Health Care Accessibility 
Reserve (see Comment 1) 

The proposed ordinances would: 

(a) Appropriate $334,000 (File 01-0677) to establish an 
Office of Contract Administration in the Department 
of Administrative Services (DAS), including 14 new 
permanent positions, to monitor compliance by 
private contractors with Chapter 6 and Chapter 12N 
of the Administrative Code. Chapter 6 sets the 
prevailing wage rates for employees of private firms 
with construction or public works contracts with the 
City. Chapter 12N sets the minimum compensation 
for employees of private firms with service contracts 
with the City and for employees of Airport tenants. 

(b) Create 14 new permanent positions in the Office of 
Contract Administration (File 01-0678) through an 
amendment to the Annual Salary Ordinance. 

In August of 2000, the Board of Supervisors approved the 
Minimum Compensation Ordinance, amending the San 
Francisco Administrative Code by adding Chapter 12N, 
and requiring City service contractors, including their 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

58 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



subcontractors, and Airport tenants, including their 
subtenants, to pay a minimum level of compensation to 
their employees (Ordinance 216-00). In September of 
2000, the Board of Supervisors approved an ordinance, 
adding Section 6.24 to Chapter 6 of the Administrative 
Code, authorizing the creation of an office within the 
Department of Administrative Services to enforce 
prevailing wage and other City public works requirements 
and to provide for a funding mechanism for that 
enforcement (Ordinance 237-00). 

Chapter 12N of the Administrative Code, or the Minimum 
Compensation Ordinance (MCO), gave responsibility to 
DAS for (a) administering that Ordinance, including 
establishing guidelines or rules for the administration of 
the subject ordinance, (b) determining if a contractor is 
subject to the requirements of the ordinance, (c) reporting 
to the Board of Supervisors annually on compliance with 
the ordinance, and (d) conducting random audits of 
contractors to determine compliance. Under the MCO, 
DAS would have authority to waive compliance with 
provisions of the MCO in certain circumstances, including 
contracts when only one contractor is able to perform the 
work or if the contract were necessary to meet an 
emergency need of the City. DAS is responsible for 
investigating claims that a contractor had breached 
provisions the MCO. Additionally, under the MCO, DAS 
would be responsible for conducting administrative 
reviews of alleged breaches of the subject ordinance and 
seeking penalties, within guidelines set by the MCO. 

Section 6.24 of Chapter 6 of the Administrative Code 
established an Office within DAS to enforce prevailing 
wage requirements and other City public works 
requirements and to provide for a funding mechanism for 
that enforcement. Under Section 6.24, the Office would 
have responsibility for (a) developing and administering a 
plan for the enforcement of the prevailing wage 
requirement and other labor standards, (b) directing 
enforcement of the City's prevailing wage requirements, 
subject to approval by the Mayor and the Director of DAS, 
(c) seeking penalties for violation of the prevailing wage 
requirements, and (d) overseeing the training of City 
personnel in labor standards enforcement. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

59 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Budget: 



These subject ordinances would appropriate funding for 
DAS to establish an Office of Contract Administration, 
under the supervision of the Director of Purchasing, 
which would include (a) existing Purchasing functions, 
such as signing off on goods and service contracts between 
City Departments and outside vendors, (b) monitoring 
and enforcing compliance with provisions of the MCO and 
"Living Health" Ordinance (see Comment 2), and (c) 
monitoring and enforcement of the Prevailing Wage 
provisions of the Administrative Code. The proposed 
supplemental appropriation ordinance would appropriate 
$334,000 from the General Fund Wage and Health Care 
Accessibility Reserve to pay for 14 new permanent 
positions and related expenses for the 2-month period 
from May 1, 2001, through June 30, 2001, as noted in the 
budget below. 

The proposed budget for the proposed Office of Contract 
Administration of $334,000, for the period from May 1, 
2001 through June 30, 2001, is as follows: 



Comments: 



Permanent Salaries (14 positions) 


$166,808 


Mandatory Fringe Benefits 
@ 28 Percent 


46,706 


Professional and Special 
Services 


35,030 


Materials and Supplies 


85.456 


Total 


$334,000 



1. The FY 2000-2001 budget includes a $5,070,000 Wage 
and Health Care Accessibility Reserve, which, according 
to the Mayor's Office, was established to fund (a) any cost 
of living adjustment (COLA) for nonprofit organizations to 
offset the increased costs resulting from the Minimum 
Compensation Ordinance, (b) any COLA to nonprofit 
organizations to offset the costs of the proposed Living 
Health Ordinance (see Comment 2), which has not yet 
been submitted to the Board of Supervisors, and (c) 
associated administrative costs. According to the Mayor's 
Office, the Wage and Health Care Accessibility Reserve 
was established in the event that FY 2000-2001 funding 
for nonprofits was not sufficient to cover increased salary 
costs to nonprofit organizations resulting from MCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 
60 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



requirements and to address any associated costs, but 
such additional funding was not needed in FY 2000-2001. 
Mr. Matthew Hymel of the Controller's Office states that 
none of the amount of $5,070,000 in the General Fund 
Wage and Health Care Accessibility Reserve has been 
expended. 

2. The pending "Living Health" Ordinance, which would 
require that City service contractors, and Airport and 
Port tenants, provide health benefits to employees 
working on City contracts, has not yet been submitted to 
the Board of Supervisors for approval. 

3. DAS is requesting the approval 14 new permanent 
positions to staff the proposed Office of Contract 
Administration, which includes Purchasing, MCO and 
"Living Health" Ordinance, and Prevailing Wage 
compliance monitoring functions. 

The 14 requested new permanent positions and their 
related salary costs are as follows: 



No. of FTE 
Positions 


Class 


Title 


Step 1 
(Biweekly- 
Annual) 


Step 5 
(Biweekly- 
Annual) 


2 


AC32 


Manager VIII 


$3,162 
$82,212 


$3,844 
$99,944 


2 


2978 


Contract Compliance Officer II 


$2,819 
$73,294 


$3,426 
$89,076 


6 


2992 


Contract Compliance Officer I 


$2,151 
$55,926 


$2,614 
$67,964 


2 


1426 


Senior Clerk Typist 


$1,388 
$36,088 


$1,682 
$43,732 


1 


1675 


Supervising Fiscal Officer 


$2,890 
$75,140 


$3,513 
$91,338 


1 


1823 


Senior Administrative Analyst 


$2,194 
$57,044 


$2,666 
$69,316 



The cost of these 14 positions at Step 5 on an annual 
basis, including mandatory fringe benefits, would be 
$1,323,443. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



According to Ms. Judith Blackwell, Director of 
Purchasing, these requested 14 new permanent positions 
would be allocated at the DAS as follows: 

(a) 2 positions to perform general administrative 
functions for the Office of Contract Administration, as 
noted in the table below. 



Classification 


Permanent 
Salaries in 
Proposed 
Supplemental 
Appropriation 


Annual 
Permanent 
Salaries at 
Step 5 


Annual 
Permanent 
Salaries 
and Fringe 
Benefits 


1.0 FTE Senior Administrative Analyst 


$12,469 


$69,316 


$88,724 


1.0 FTE Supervising Fiscal Analyst 


14.614 


91.338 


116.912 


Total -2.0 FTE 


$27,083 


$160,654 


$205,636 



(b) 9 positions for MCO and Living Health Ordinance 
compliance monitoring functions, as noted in the table 
below. 



Classifications 


Permanent 
Salaries in 
Proposed 
Supplemental 
Appropriation 


Annual 
Permanent 
Salaries at 
Step 5 


Annual 
Permanent 
Salaries 
and Fringe 
Benefits 


1.0 FTE Manager VIII 


$15,991 


$99,944 


$127,928 


1.0 FTE Contract Compliance Officer II 


14,252 


89,076 


114,017 


6.0 FTE Contract Compliance Officer I 


65,245 


407,784 


521,963 


1.0 FTE Senior Clerk Typist 


6,997 


43.732 


55.977 


Total - 9.0 FTE 


$102,485 


$640,536 


$819,885 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

62 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



(c) 3 positions for Prevailing Wage compliance monitoring 
functions, as noted in the table below. 



Classification 


Permanent 
Salaries in 
Proposed 
Supplemental 
Appropriation 


Annual 
Permanent 
Salaries at 
Step 5 


Annual 
Permanent 
Salaries 
and Fringe 
Benefits 


1.0 FTE Manager VIII 


$15,991 


$99,944 


$127,928 


1.0 FTE Contract Compliance Officer II 


14,252 


89,076 


114,017 


1.0 FTE Senior Clerk Typist 


6.997 


43.732 


55.977 


Total - 3.0 FTE 


$37,240 


$232,752 


$297,922 



4. Ms. Blackwell states that the 2 requested new 
permanent positions for general administration 
responsibilities would provide services to the Office of 
Contract Administration, including Purchasing functions, 
MCO and proposed "Living Health" Ordinance compliance 
monitoring functions, and Prevailing Wage compliance 
monitoring functions. Ms. Blackwell states that the 
Senior Administrative Analyst position would serve as an 
ombudsman, performing such functions as working with 
contractors regarding compliance with the subject wage 
and health benefit requirements, working with the public 
regarding dispute resolution regarding the subject wage 
and health benefit requirements, and other duties. DAS 
has temporarily reassigned a vacant 1952 Senior 
Purchaser position to a Special Assistant 1369 position, 
and filled that position, effective March 5, 2001. DAS has 
informed the Budget Analyst that it was the intention of 
DAS to eventually transition the Special Assistant 1369 
position into the Senior Administrative Analyst position. 
However, the Budget Analyst has not found sufficient 
justification for the Senior Administrative Analyst 
position, and notes that DAS filled the position without 
providing sufficient justification and prior to obtaining 
Board of Supervisors approval. In addition, Ms. Blackwell 
states that the Supervising Fiscal Analyst would perform 
general fiscal responsibilities for the DAS Office of 
Contract Administration. Currently, Administrative 
Services, of which the Office of Contract Administration 
would be one division, does not have a Supervising Fiscal 
Analyst. The Budget Analyst does not find justification for 



BOAKD OF SUPERVISORS 
BUDGET ANALYST 

63 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



this high level position, at an annual salary and benefit 
rate at Step 5 of $116,912, within the Office of Contract 
Administration, and recommends disapproval of this 
position at this time. 

5. DAS is proposing to create 9 new positions to monitor 
and enforce compliance with the provisions of the MCO 
and the proposed "Living Health" Ordinance. According to 
Ms. Blackwell, the City has approximately 1,250 
contracts, which are covered by the MCO. Ms. Blackwell 
states that the DAS does not currently have the database 
capability to track the number of employees covered by 
these contracts and does not know how many employees 
would be covered by the MCO. According to Ms. 
Blackwell, DAS Office of Contract Administration staff 
would audit service contractors, including subcontractors, 
for MCO compliance, and investigate complaints 
regarding such contractors. 

6. Of the 9 new positions, DAS is proposing to create one 
Manager VIII, with an annual salary cost of $99,944 at 
Step 5, to monitor compliance with MCO and proposed 
"Living Health" Ordinance requirements. Because the 
MCO and proposed "Living Health" Ordinance division 
will report directly to the Director of Contract 
Administration, the Budget Analyst does not find 
adequate justification for this new management position 
and therefore, recommends disapproval of one Manager 
VIII position at this time. 

7. In addition to the one Manager VIII position, DAS is 
proposing to create eight positions for MCO and "Living 
Health" Ordinance compliance monitoring, including one 
Compliance Officer II, six Compliance Officer I positions, 
and one Senior Clerk Typist. Because the "Living Health" 
Ordinance has not yet been submitted for Board of 
Supervisors approval and because DAS does not currently 
have detailed workload data to justify their request for 
eight new positions, the Budget Analyst recommends 
approval of four of the eight proposed new positions and 
disapproval of four of the eight proposed new positions. 
The Budget Analyst recommends approval of one 
Compliance Officer II and three Compliance Officer I 
positions and recommends disapproval of three 

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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Compliance Officer I positions and one Senior Clerk 
Typist position. Further, the Budget Analyst 

recommends that DAS submit detailed information 
regarding the MCO compliance monitoring program to the 
Board of Supervisors during the FY 2001-2002 budget 
review, including number of service contractors and 
covered employees, a proposed schedule of random audits 
as defined by the MCO, the number of complaints 
received and investigated since approval of the MCO in 
August of 2000, and other details of the expected 
workload and performance objectives for the MCO 
compliance monitoring by the proposed Office of Contract 
Administration. 

8. Currently, City Departments, which administer 
construction and public works contracts, are responsible 
for monitoring compliance with the Prevailing Wage 
requirements of the Administrative Code. These City 
Departments are the Airport, the Port, the Municipal 
Transportation Authority (MTA), Department of Public 
Works (DPW), the Recreation and Park Department 
(RPD), and the Public Utilities Commission (PUC). 

9. The Airport is the only City agency with a separate 
administrative division for administration and 
enforcement of Prevailing Wage requirements. According 
to Ms. Helen Lucas of the Airport, the Construction and 
Tenant Employment Monitoring Division is responsible 
for monitoring Airport construction contracts for 
compliance with Prevailing Wage requirements, and 
monitoring Airport tenants and contractors, including 
subtenants and subcontractors, for compliance with the 
Quality Standards Program (QSP). 1 Ms. Lucas states 
that the Airport proposes to reduce the number of 
budgeted positions in the Construction and Tenant 
Employment Monitoring Division by 9.5 FTEs, from 17.5 
FTEs to 8.0 FTEs, in the FY 2001-2002 budget due to the 



1 The Quality Standards Program (QSP), implemented by the Airport, beginning April 1, 2000, 
covers private firms, including airline and concession tenants and third party vendors, employing 
personnel who are involved in performing services which directly impact safety and/ or security. 
Under the QSP, the Airport sets standards for hiring and training of covered employees and sets a 
minimum compensation of $10 per hour for employees who receive health benefits and $11.25 per 
hour for employees without health benefits, effective January 1, 2001. The health benefits level is 
set equal to the level of benefits provided by the Kaiser Health Plan. 

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Memo to Finance Committee 

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decrease in Airport construction projects. According to 
Ms. Lucas, in addition to monitoring construction and 
facilities management contracts for Prevailing Wage 
requirements, the Division will monitor compliance with 
QSP and MCO requirements. Ms. Blackwell states that 
the Airport would continue to monitor Prevailing Wage 
and MCO compliance at the Airport, and would not he 
under the jurisdiction of the proposed Office of Contract 
Administration. 

10. DPW, PUC, the Port and MTA do not have separate 
administrative divisions to monitor and enforce prevailing 
wage requirements. However, each of these four City 
departments use construction management or resident 
engineer staff to monitor construction and public works 
contracts for compliance with Prevailing Wage 
requirements. In DPW, Bureau of Construction 
Management staff review certified payrolls 2 , and conduct 
site visits to investigate complaints. The DPW resident 
engineer at the construction site is responsible for 
determining if the workers' jobs are correctly classified. In 
the PUC, the Port, and MTA, resident engineers and 
construction managers are responsible for reviewing 
certified payrolls. DPW reimburses the Human Rights 
Commission for one Human Rights Commission 
Representative to monitor Prevailing Wage compliance 
for DPW construction and public works contracts. MTA 
Contract Compliance Office staff conduct non-scheduled 
on-site visits of MTA construction projects for various 
reasons, including to check that the employees working on 
the project are the same as identified in the certified 
payroll. 

11. RPD was given separate authority to enter into major 
construction contracts in March of 2000, when 
SanFrancisco voters approved Proposition C. According 
to Mr. Gary Hoy of RPD, RPD construction contracts are 
currently managed by DPW. 

12. In accordance with Ordinance 237-00, which 
authorized creation of an office for enforcing Prevailing 



2 Contractors are required to maintain payroll records for each pay period within the month and to 
submit these records ("certified payroll") monthly, prior to receiving payment on the contract. 

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Memo to Finance Committee 

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Wage requirements within DAS, the proposed Office of 
Contract Administration would assume responsibility for 
monitoring and enforcing Prevailing Wage requirements. 
According to Ms. Blackwell, the Office of Contract 
Administration would oversee the Prevailing Wage 
compliance monitoring of the five City departments 
(DPW, PUC, MTA, the Port, and RPD), but the five City 
departments would continue their current programs to 
monitor Prevailing Wage compliance. Therefore, the 
Office of Contract Administration costs for monitoring 
compliance with Prevailing Wage requirements would be 
in addition to the work and the related costs incurred by 
the five City departments already performing this 
function. Ms. Blackwell states that the Airport would 
continue to have responsibility for their own construction 
contracts and would not be covered by the proposed DAS 
Office of Contract Administration. 

13. The City departments responsible for construction and 
public works contracts have not systematically tracked 
compliance with the Prevailing Wage requirements in 
Chapter 6 of the Administrative Code. Therefore, the 
effectiveness of current City efforts to monitor and enforce 
Prevailing Wage compliance, and the amount of 
additional staff needed for Prevailing Wage compliance 
monitoring and enforcement, is not known. The Budget 
Analyst recommends that the Board of Supervisors 
request a review of the Prevailing Wage compliance 
monitoring program to determine the effectiveness of the 
City's current monitoring effort, the incidence of 
violations of the Prevailing Wage requirements, and the 
need for additional staff to perform the function of the 
proposed Office of Contract Administration. This review 
could be conducted by the Controller, the Budget Analyst, 
the Legislative Analyst, or an outside contractor, as 
determined by the Board of Supervisors. 

14. As previously noted, DAS is proposing to create 3 new 
positions in the Office of Contract Administration to 
monitor compliance with the Prev aili ng Wage 
requirements, set forth in Chapter 6 of the Administrative 
Code. These positions include one Manager VIII to serve 
as the Labor Standards Enforcement Officer, one 



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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Contract Compliance Officer II and one Senior Clerk 

Typist. ' 

15. The subject Labor Standards Enforcement Officer role 
was authorized under Ordinance 237-00. Under 
Ordinance 237-00, the Labor Standards Enforcement 
Officer would (a) develop and administer a plan for the 
enforcement of the Prevailing Wage requirements and 
other labor standards 3 , (b) direct enforcement of the City's 
Prevailing Wage requirements subject to approval by the 
Mayor and the Director of DAS, (c) seek penalties for 
violation of the prevailing wage requirements, and (d) 
oversee training of City personnel in labor standards 
enforcement. Ms. Blackwell states that DAS temporarily 
upgraded a vacant 1956 Senior Purchaser position to a 
Manager VIII position, and hired a Manager VIII to serve 
as the Labor Standards Enforcement Officer as of 
February 26, 2001, prior to Board of Supervisors approval 
of this requested new Manager VIII position. Therefore, 
because DAS filled the proposed new Manager VIII 
position prior to obtaining Board of Supervisors approval 
for the proposed new position, the Budget Analyst 
considers retroactive approval of this proposed position to 
be a policy matter. 

16. Ms. Blackwell states that DAS has temporarily 
upgraded one vacant 1950 Purchaser position to a 
Contract Compliance Officer II position, and filled this 
position, effective April 30, 2001, prior to Board of 
Supervisors approval of the requested new position. 
Therefore, because DAS filled the proposed new Contract 
Compliance Officer II position before obtaining Board of 
Supervisors approval, the Budget Analyst considers 
retroactive approval of this proposed new position a policy 
matter. 

17. Additionally, Ms. Blackwell states that DAS has 
upgraded one vacant 1952 Purchaser position to Contract 
Compliance Officer I for the monitoring and enforcement 
of compliance with Prevailing Wage requirements, and 
filled this position, effective May 7, 2001. Ms. Blackwell 



3 Other labor standards include a 5 eight-hour day workweek, totaling 40 hours, and overtime pay 
for hours worked in excess of 8 hours in one day and 40 hours in one week. 

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states that this position will be submitted to the Board of 
Supervisors for approval in the FY 2001-2002 budget. The 
Budget Analyst notes that DAS has created a Contract 
Compliance Officer I position, and filled this position, 
without providing sufficient justification for this position 
and prior to obtaining Board of Supervisors approval. 
Additionally, as stated in Comment 13, the Budget 
Analyst recommends that the Board of Supervisors 
request a review of the Prevailing Wage compliance 
monitoring program to determine the need for additional 
staff to perform the function of the proposed Office of 
Contract Administration. 

18. The Budget Analyst finds that DAS has not provided 
sufficient justification for the proposed new Senior Clerk 
position and recommends disapproval of one new Senior 
Clerk Typist position. 

19. The subject supplemental appropriation ordinance 
includes $35,030 for Professional and Special Services and 
$85,456 for Materials and Supplies, totaling $120,486. 
The Budget Analyst recommends approval of $22,000 for 
four computers and four computer workstations, and 
recommends disapproval of $98,486, because the 
Department has not provided sufficient justification for 
these expenditures. 

20. The proposed supplemental appropriation ordinance 
would appropriate funds from the FY 2000-2001 General 
Fund Wage and Health Care Accessibility Reserve. The 
Budget Analyst recommends that the Office of Contract 
Administration costs for monitoring MCO and Prevailing 
Wage requirements be charged back to the appropriate 
Departments on a work order basis in order to decrease 
future costs to the General Fund when services are 
provided to non-General Fund Departments. 

21. In Files 01-0677 and 01-0678, the salary steps for the 
Manager VIII position are the salary steps that will apply 
in FY 2001-2002. The Budget Analyst recommends 
amending Files 01-0677 and 01-0678 to reflect the actual 
salary steps for the Manager "VTII position in FY 2001- 
2002. 



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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Summary: In summary, of the 14 proposed new positions, the Budget 

Analyst recommends approval of four positions and 
disapproval of eight positions, and considers approval of 
two positions to be a policy matter for the Board of 

Supervisors. 

• Of the four new positions recommended for approval, 
the Budget Analyst recommends approval of one 
Contract Compliance Officer II and three Contract 
Compliance Officer I positions for monitoring 
compliance with MCO provisions. 

• Of the 8 new positions recommended for disapproval, 
the Budget Analyst recommends disapproval of (a) one 
Senior Administrative Analyst and one Supervising 
Fiscal Analyst in the general administration division 
of the Office of Contract Administration; (b) one 
Manager VIII, three Contract Compliance Officer I 
positions, and one Senior Clerk Typist in the MCO 
division of the Office of Contract Administration, and 
(c) one Senior Clerk Typist in the Prevailing Wage 
division of the Office of Contract Administration. 

• Of the two new positions considered to he a policy 
matter, the Budget Analyst considers retroactive 
approval of one Manager VIII and one Contract 
Compliance Officer II in the Prevailing Wage division 
of the Office of Contract Administration to be a policy 
matter for the Board of Supervisors, because DAS 
filled these two proposed new positions prior to 
obtaining Board of Supervisors approval. 

In addition, the Budget Analyst recommends (a) that DAS 
submit detailed information regarding the MCO 
compliance monitoring program to the Board of 
Supervisors during the FY 2001-2002 budget review, 
including the number of service contractors and covered 
employees, schedule of random audits as defined by the 
MCO, number of complaints received and investigated 
since approval of the MCO in August of 2000, and other 
details of the expected workload for the MCO compliance 
monitoring division; (b) that the Board of Supervisors 
request a review of the Prevailing Wage compliance 
monitoring program performance to determine the 
effectiveness of the City's current monitoring effort, the 
incidence of violations of the Prevailing Wage 

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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

requirements, and the need for additional staff; and, (c) 
that the Office of Contract Administration costs for 
monitoring MCO and Prevailing Wage requirements be 
charged back to the appropriate City Departments on a 
work order basis to decrease future costs to the General 
Fund when services are provided to non-General Fund 
Departments. 

The Budget Analyst also recommends approval of $22,000 
for computers and workstations and recommends 
disapproval of $98,486 because the Department provided 
insufficient justification for these expenditures. 

Of the requested supplemental appropriation of $334,000, 
the Budget Analyst recommends approval of $67,000, and 
disapproval of $228,289 and considers approval of $38,711 
to be a policy matter for the Board of Supervisors. 

Recommendations: File 01-0677 

1. Reduce the proposed one new permanent Contract 
Compliance Officer II and three new permanent Contract 
Compliance Officer I by $15,000, from $60,000 for salaries 
and fringe benefits to $45,000, for the period from May 15, 
2001 through June 30, 2001, as noted in Comment 7. 

2. Disapprove one Manager VIII (see Comment 6), three 
Contract Compliance Officer I positions and one Senior 
Clerk Typist (see Comment 7), one Senior Administrative 
Analysts and one Supervising Fiscal Officer (see 
Comment 4), and one Senior Clerk Typist (see Comment 
17), totaling $114,804 in salary and mandatory fringe 
benefits. 

3. Approve $22,000 for computers and workstations and 
disapprove $98,486, as noted in Comment 19. 



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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Implementation of these three recommendations would 
result in a reduction of $267,000, from $334,000 to 
$67,000, as follows: 





Amount 
Requested 


Amount 
Recommended 


Budget 

Analyst's 

Recommended 

Reductions 


Permanent Salaries 


$166,808 


$35,156 


$131,652 


Mandatory Fringe Benefits 


46,706 


9,844 


36,862 


Professional and Specialized Services 


35,030 


22,000 


13,030 


Materials and Supplies 


85,456 





85,456 


Total 


$334,000 


$67,000 


$267,000 



If the Board of Supervisors approve the two new positions 
considered to be a policy matter, one Manager VIII 
position and one Contract Compliance Officer II position, 
totaling $38,711, then the total amount of the Budget 
Analyst's recommended reduction would be $228,289, 
from $334,000 to $105,711. 

4. Approval of one new Manager VIII position (see 
Comment 15) and one new Contract Compliance Officer II 
position (see Comment 16), totaling $38,711 in salary and 
mandatory fringe benefits, is a policy matter for the 
Board of Supervisors. 

File 01-0678 

5. Amend lines 3 through 5, to state "Amending 
Ordinance 181-00 (Annual Salary Ordinance 2000/2001) 
Reflecting the Creation of Four New Positions in 
Administrative Services, Office of Contract 
Administration", and amend lines 12 through 17 to delete 
8 positions, including one Manager VIII, three Contract 
Compliance Officer I positions, two Senior Clerk Typists, 
one Senior Administrative Analyst, and one Supervising 
Fiscal Analyst. Implementation of this recommendation 
would result in approval of one Contract Compliance 
Officer II and one Contract Compliance Officer I. 
Approval of one Manager VIII position and one Contract 
Compliance Officer II position is a policy matter for the 
Board of Supervisors. 



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Memo to Finance Committee 

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File 01-0677 



6. Amend page 2, line 1, to delete "3320 B 4036" and add 
"3162 B 3844"to reflect the actual salary steps for the 
Manager VIII position in FY 2000-2001, as noted in 
Comment 21. 

File 01-0678 

7. Amend line 12 to delete "$3320 B 4036" and add "3162 
B 3844" to reflect the actual salary steps for the Manager 
VIII position in FY 2000-2001, as noted in Comment 21. 

8. Require DAS Office of Contract Administration to 
submit detailed information regarding the MCO 
compliance monitoring program to the Board of 
Supervisors during the FY 2001-2002 budget review, as 
noted in Comment 7. 

9. The Budget Analyst recommends that the Board of 
Supervisors request a review of the Prevailing Wage 
compliance monitoring program to determine the 
effectiveness of the City's current monitoring effort, the 
incidence of violations of the Prevailing Wage 
requirements, and the need for additional staff to perform 
the function of the proposed Office of Contract 
Administration. This review could be conducted by the 
Controller, the Budget Analyst, the Legislative Analyst, 
or an outside contractor, as determined by the Board of 
Supervisors, as noted in Comment 13. 

10. Require that the Office of Contract Administration 
charge costs for monitoring MCO and Prevailing Wage 
requirements to the appropriate City Departments on a 
work order basis when services are provided to non- 
General Fund Departments in order to reduce future 
General Fund costs, as noted in Comment 20. 



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Memo to Finance Committee 

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Item 9 - File 01-0257 
Department: 

Item: 



Amount: 
Source of Funds: 



Description: 



Department of the Environment 
Mayor's Office of Economic Development 

Hearing to consider the release of reserved funds for the 
Department of the Environment for the Environmental 
Health and Energy (EHE) Initiative (see Comment 1) in 
the amount of $13,000,000 to (1) initially fund 13 grants 
for projects in the Bayview Hunters Point and Potrero 
areas in the amount of $8,614,393 which have been 
recommended by the Department of the Environment 
based on a Request for Proposal process; (2) pay for 
administrative costs for the Department of the 
Environment in the amount of $1,300,728; and, (3) 
subsequently fund additional grants to continue the EHE 
Initiative program for projects wherein the grantees have 
not yet been identified in the amount of $3,084,879. 

$13,000,000 

State grant funds appropriated and reserved by the Board 
of Supervisors for the Mayor's Office of Economic 
Development in FY 1999-2000 budget, pending 
submission of budget and program details. According to 
Mr. David Assmann of the Department of the 
Environment, the subject $13,000,000 was placed in the 
Mayor's Office of Economic Development until an exact 
plan could be determined on how the monies would be 
disbursed to the Bayview Hunters Point and Potrero 
communities. Mr. Assmann states that due to the 
legislative language around environmental mitigation and 
level of oversight required, the Department of the 
Environment was charged with developing and 
administering the grant program. Therefore, Department 
of the Environment requests that the subject funds in the 
amount of $13,000,000 on reserve in the Mayor's Office of 
Economic Development be released to the Department of 
the Environment since the Department of the 
Environment will manage the Environmental Health and 
Energy Initiative. 

In the Fall of 1998 the State of California appropriated 
funding in the amount of $13,000,000 to support the City 

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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



and County of San Francisco with $3,000,000 to be used 
to mitigate community issues and avoid environmental 
impacts arising from the sale of the Potrero Power Plant 
by the Pacific Gas and Electric Company and $10,000,000 
to be used by the City and County for infrastructure 
associated with the shut down of the Hunters Point Power 
Plant and the sale and possible expansion of the Potrero 
Power Plant. 

According to Mr. Assmann, in the Fall of 1999, one year 
later, the Mayor directed the Department of the 
Environment, in collaboration with the Mayor's Office of 
Economic Development, to develop a program for the 
disbursement of the $13,000,000 in State funds previously 
appropriated and reserved by the Board of Supervisors in 
the Mayor's Office of Economic Development's FY 1999- 
2000 budget. 

Mr. Assmann states that a project team consisting of staff 
members from the Department of the Environment, the 
Mayor's Office of Economic Development, and Deputy 
City Attorney Ms. Rona Sandler, concluded that the State 
grant funds for the affected communities should be 
allocated to organizations under one to three-year grants. 
The Commission on the Environment created an 
Environmental Health and Energy Ad Hoc Committee to 
oversee the development of the grant program and select 
applicants to receive funding based on a Request for 
Proposal (RFP) process in conjunction with the 
Department of the Environment, according to Mr. 
Assmann. The Ad Hoc Committee, according to Mr. 
Assmann, was made up of the Commission on the 
Environment's President Mr. Randall Hayes, Vice- 
President Mr. Parin Shah and one Commission member, 
Ms. Shelley Bradford-Bell. The Ad Hoc Committee sought 
input from the public, City officials, nonprofit 
organizations and foundations and held five public 
meetings, including two in the affected communities, to 
ensure that all comments and concerns were considered in 
developing priorities and criteria for the grant program. 
Based on the State appropriation requirements, public 
input and staff recommendations, the Ad Hoc Committee 
prioritized grant projects in the following areas: 



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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



1. Environmental Justice: Funded projects must 
address environmental pollution education; 
community organization on environmental issues; land 
use, economic and infrastructure development; and, 
community empowerment. 

2. Environmental Health: Funded projects must 
improve the environmental health of community 
members by focusing on pollution prevention and 
education; create or enhance open space and 
recreation; and, improve nutrition of community 
members. 

3. Energy and Climate Change: Funded projects must 
promote renewable energy and energy efficiency; 
reduce the use and generation of fossil fuels; and 
develop and promote alternative fuels and modes of 
transportation. 

Attachment VII, provided by the Department of the 
Environment, describes the Department's outreach efforts 
to inform all potential grant applicants of the RFP 
process. According to Mr. Assmann, the Ad Hoc 
Committee conducted the RFP process in two phases. In 
phase one, applicants submitted a letter of intent to apply 
for the subject grant monies, including an initial grant 
application. The Ad Hoc Committee reviewed all 
applications and invited 17 of the 50 applicants, who 
submitted a letter of intent and initial application, to 
proceed to the second phase and submit a full grant 
proposal (see page 1 of Attachment I, provided by the 
Department of the Environment, for the criteria by which 
the 17 applicants were selected to submit a full grant 
application). Based on an evaluation of these proposals 
using the same criteria used to select the 17 applicants to 
submit a full grant proposal, the Ad Hoc Committee then 
selected 13 grant applications to receive funding. 
Attachments II and III, provided by the Department of 
the Environment, contains the organizations selected, 
funding recommendations and project descriptions. 
According to Mr. Assmann, the Department of the 
Environment has taken the lead role in the 
Environmental Health and Energy (EHE) Initiative grant 
program and the RFP process used to select the grantees. 



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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Approval of the proposed release of reserved funds in the 
amount of $13,000,000 would (1) fund 13 grants for 
projects in the Bayview Hunters Point and Potrero 
communities conducted by 13 organizations in the amount 
of $8,614,393; (2) fund $1,300,728 of Department of the 
Environment Administrative costs for three years; and (3) 
provide $3,084,879 to further implement the EHE 
Initiative (see Comment 1) through the award of 
additional grants. Mr. Assmann advises that the first 13 
grants would begin on July 1, 2001. The grant period 
would end by June 30, 2002 for four of the thirteen 
grantees, June 30, 2003 for three of the thirteen grantees 
and June 30, 2004 for six of the thirteen grantees. 
Attachment IV contains the timeline of the 13 selected 
grantees. 

Budget: A summary budget for the proposed Environmental 

Health and Energy (EHE) Initiative is as follows: 

13 Grants $8,614,393 

Grant Administrative Costs 

(Approximately 10% of the $13 million State Appropriation) 1,300,728 

Amount for which no funding allocations 
have been recommended 3,084.879 

Total $13,000,000 

Attachment V, provided by the Department of the 
Environment, contains budget details for the Grant 
Administrative Costs of $1,300,728 and the 13 grant 
budgets. Grant allocations of $8,614,393 and Grant 
Administrative Costs budget details of $1,300,728 have 
been provided and total $9,915,121. Mr. Assmann advises 
that there are no budget details for the balance of 
$3,084,879 out of the $13,000,000 requested since grants 
have not yet been awarded from these funds. 

Comments: 1. According to Mr. Assmann, the Environmental Health 

and Energy Initiative (EHE Initiative) is a grant program 
based on community input to address the environmental 
health and energy issues in the Bayview Hunters Point 
and Potrero Hill neighborhoods. Mr. Assmann advises 
that the goal of the Environmental Health and Energy 
(EHE) Initiative is to improve the quality of life of the 
residents of the Bayview Hunters Point and Potrero Hill 

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Memo to Finance Committee 

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communities. The EHE Initiative proposes to address the 
environmental and economic disparities in the Bayview 
Hunters Point and Potrero communities by training and 
employing residents to conduct assessments and 
implement programs in the areas of environmental health 
and energy. Mr. Assmann advises that funding the 13 
recommended proposals will provide seed money to 
alleviate the environmental and economic burdens of the 
Bayview Hunters Point and Potrero communities. The 13 
proposed grantees including Hetch Hetchy, the 
Department of Public Health, 9 nonprofit organizations 
and 2 for-profit firms (M. Cubed and Tetra Tech) are 
shown in Attachment VIII. 

2. According to Mr. Assmann, the $3,084,879 designated 
for additional EHE Initiative grants will involve the 
issuance of another Request for Proposal (RFP) for 
additional projects to mitigate the environmental impact 
of the two power plants in Bayview Hunters Point and 
Potrero communities. Mr. Assmann adds that in March 
2001, the Mayor directed Dr. Mitch Katz, Director of the 
Department of the Public Health (DPH), to convene a 
series of meetings of Department Heads to address the 
severe health problems of the Bayview Hunters Point 
community. The Chair of the Board of Supervisors Public 
Health and Environment Committee has chaired these 
meetings. After four meetings, additional priority areas 
were identified in the areas of environmental health and 
energy. 

According to Mr. Assmann, the Department of the 
Environment is requesting that the remaining $3,084,879 
from the $13,000,000 State appropriation for 
environmental mitigation be transferred from the Mayor's 
Office of Economic Development to the Department of 
Pubic Health to establish an Environmental Health and 
Energy Fund. The priority areas identified in the 
Department Head meetings and the goals set forth in the 
EHE Initiative will be used as guidelines for funding 
grantees selected from the additional RFP. The Budget 
Analyst recommends that the $3,084,879 remain on 
reserve until the RFP process is developed and until the 
grantees are selected. Attachment VI, provided by the 
Department of the Environment describes the proposed 

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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



process to allocate the remaining funds of $3,084,879. 
DPH and the Department of the Environment anticipate 
issuing an RFP for such additional grants in August 2001, 
according to Mr. Assmann, for the remaining unallocated 
grant funds of $3,084,879. 

3. There are five proposed grants for $500,000 or more. 
See Attachments III and IV for applicants requesting 
$500,000 or more. Those grantees are: (1) Alternative 
Community Energy (ACE) which is a collaboration 
between Hetch Hetchy and Bayview-Hunters Point 
Community Advocates to reduce reliance on fossil fuels in 
the amount of $1.5 million. Mr. Assmann advises that 
Hetch Hetchy will take the lead role in the ACE project 
and would receive grant funds in the amount of $1.5 
million for the proposed ACE project; (2) Literacy for 
Environmental Justice is working with the Port to create 
a living classroom at Heron's Head Park in Hunters Point 
in the amount of $897,942. Mr. Assmann advises that the 
Port will provide approximately $25,000 of in-kind 
contributions which include 1,000 square foot of land in 
Heron's Head Park for a classroom and staff time to assist 
in project design; (3) Strybring Arboretum will work with 
the Department of Public Works (DPW) and the 
Recreation and Parks Department (RPD) on a 
horticulture program and park improvement in the 
amount of $1,500,000. DPW will receive $145,816 and 
RPD will receive $959,979; (4) M. Cubed, a private for- 
profit firm, will work with the Department of the 
Environment to create an energy cooperative to reduce 
and track energy consumption and educate the 
community about energy reduction measures in the 
amount of $1,500,000. The Department of the 
Environment would be allocated $65,000 of the 
$1,500,000 granted to M. Cubed to collaborate on the 
project; (5) the Health and Environment Resource Center 
will work with the Redevelopment Agency to begin 
planning for the expansion of the Southeast Health 
Center and its current healthcare services in the amount 
of $500,000. According to Ms. Sraddha Mehta from the 
Department of the Environment, the Redevelopment 
Agency would serve in an advisory role and no monies are 
currently budgeted for the Redevelopment Agency in the 
grant budget. 

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Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



4. According to Mr. Assmann, the budget for the 
Administrative Costs includes three new FTE Grant 
Coordinator positions to manage the Environmental 
Health and Energy (EHE) Initiative. 

No. of Step 1 Step 5 

FTE (Biweekly- (Biweekly- 
Positiops Classification Title Annual) Annual) 

3 1368 Grant $1,914 $2,326 

Coordinator 

$49,764 $60,476 



According to Mr. Assmann, the annual cost of these 
positions including fringe benefits ranges from $63,698 to 
$77,409. The Grant Coordinators would manage all 
grants, provide fiscal and administrative support, 
negotiate and track grant contracts, conduct site visits, 
facilitate communication between City Departments and 
all grantees, manage the grant program database, review 
all quarterly, annual and final reports from grantees, and 
produce any necessary reports (see pages 2 and 3 of 
Attachment I for the justification of the Grant 
Coordinator positions). Although Mr. Assmann states 
that the Grant Coordinators will be coded as "G" for 
grant-funded and would terminate at the end of the 
proposed three-year grant program, these positions have 
not yet been designated as "G" positions. All of the new 
positions are budgeted at Step 2 for year one of the 
proposed grant program, with increases to Steps 3 and 4 
for the second and third year of the proposed grant 
program. According to Mr. Assmann, the subject Grant 
Coordinator positions were budgeted at Step 2 because of 
the anticipated workload and the level of expertise that 
would be needed to coordinate the proposed 
Environmental Health and Energy (EHE) Initiative. Mr. 
Assmann advises that it is possible that the applicants for 
the Grant Coordinator positions could be hired at Step 1. 

The Grant Administrative Costs also includes a 0.2 FTE 
Deputy Director position and 0.1 FTE Commission 
Secretary position. Mr. Assmann advises that these 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

80 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

positions are existing permanent positions currently 
funded by the General Fund budget. The budget details 
for all Grant Administrative Costs are included in 
Attachment V. Mr. Assmann advises that the total cost of 
$300,000 in professional services is for outside 
consultants for a three-year period needed to evaluate the 
progress of each project (see pages 4 and 5 of Attachment 
I under the subheading Description of how Technical 
Assistance and Evaluation Costs will be spent). 
According to Mr. Assmann, the outside professional 
services consultants have not yet been selected. 
Therefore, the Budget Analyst recommends continuing to 
reserve $300,000 in professional services for the outside 
consultants, pending selection of such outside consultants 
and submission of budget details, including estimated 
hours and hourly rates, to the Finance Committee. 

5. According to Mr. Assmann, as explained in 
Attachment IX, although the State allocated the subject 
$13,000,000 to the City in the Fall of 1998, there has been 
no request made to the Board of Supervisors to expend 
these funds for approximately 2.5 years because from the 
Fall of 1999 to date, the Department of the Environment 
and the Mayor's Office of Economic Development held 
several community meetings (that began in the Spring of 
2000) and developed and implemented a two-phase grant 
process with guidelines that were based on community 
input. Mr. Assmann also states in Attachment IX that he 
has no information on the reason for the delay between 
the Fall of 1998 and the commencement of the 
Department of the Environment's involvement in the Fall 
of 1999. 

Recommendations: 1. Continue to reserve $3,084,879 pending the 

development of the RFP process, selection of grantees and 
submission of budget details to the Finance Committee, in 
accordance with Comment 2 above. 

2. Continue to reserve $300,000 in professional services 
for the outside consultants, pending selection of such 
consultants and submission of budget details to the 
Finance Committee, in accordance with Comment 4 
above. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

81 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



3. Code the requested three mew Grant Coordinator 
positions as "G" for grant -funded, in accordance with 
Comment 4 above. 

4. Approval of the proposed release of reserve in the 
amount of $9,615,121 ($13,000,000 less $3,084,879 less 
$300,000) is a policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

82 



Attachment I 
Page 1 of 5 

TO: Maureen Singleton 

FROM: David Assmann 

DATE: May 1,2001 

RE: Questions regarding Environmental Health and Energy Grant 

Environmental Health and Energy grant selection criteria 

Chapter 324 Stats. 1998 (Trailer Bill for CPUC Budget) appropriated S13 million to the City and 
County of San Francisco according to the following specifications: 

"...and SI 3, 000,000 shall be expended for the support of the City and County of San Francisco, 
with S3,000,000 to be used to mitigate community issues and avoid environmental impacts 
arising from the sale of the Potrero powerplant by the Pacific Gas and Electric Company and 
510,000,000 to be used by the City and County of San Francisco for infrastructure associated 
with the shut down of the Hunters Point powerplant or the sale of the Potrero powerplant." 

A grant program was developed to disburse the above mentioned funds. The Commission on the 
Environment, which developed the criteria for awarding the grants, held five public meetings, 
including two in the Bayview and Potrero Hill communities, to ensure that all comments and 
concerns were considered in developing the grant program. Based on input from these meetings, 
the state appropriation, and staff recommendations, the Commission prioritized projects in the 
environmental justice, environmental health and energy and climate change. 

Groups seeking funding were required to submit a letter of intent (LOT). Printed instructions for 
LOI submissions defined the criteria as follows (see binder section "guidelines" for complete 
criteria): 

• Funding in the environmental justice category will include environmental pollution, 
education and organizing, land use, economic and infrastructure development, 
community empowerment and collective decision-making. 

• Funding in the area of environmental health will give preference to programs that focus 
on pollution prevention and education; open space, recreation and nutrition; and solutions 
to respiratory illness and cancers. 

• Funding in the energy and climate change arena will promote renewable energy and 
energy efficiency, reduce the use and generation of fossil fuels and develop and promote 
alternative fuels and modes of transportation. 

• All project proposals must tangibly impact and improve environmental conditions in the 
Hunters Point and Potrero neighborhoods. The Commission will give preference to 
projects that promote infrastructure rather than those that provide an ongoing service. 

Also, the instructions specified that grants would not fund the following types of programs: grants 
or scholarships for individuals, conferences, documentary films, fundraisers, campaign outreach, 
endowments and budget shortfalls. 

In accordance with these guidelines, proposals that best illustrated the project/program would 
tangibly impact and improve environmental conditions in the two neighborhoods were requested 
to submit a full proposal. Out of the original fifty LOI's, seventeen were invited to submit full 
proposals. Of those, fourteen projects representing thirteen groups were ultimately recommended 
to receive funding. 

In reviewing LOI's, the Commission rejected projects that: 

• did not meet the guidelines, deadlines or were incomplete; 



Source: Department of the Environment 
83 



Attachment I 
^age Z or 5 



did not articulate goals and objectives clearly; 

could not be implemented in the timeframe allotted; 

could potentially collapse without future funding and were deemed not sustainable; 

could not guarantee implemented or sustainable results. 



Justification for three new positions 

Scope of Work 

The scope of work to administer the grants includes but is not limited to the following activities: 
management of the EHE initiative, coordination of the grants, fiscal oversight and administrative ■ 
support to grantees, negotiation and tracking of contracts, site visits, facilitation of 
communication among city departments and grantees, management of the database, production of 
reports and coordination of the second Request for Proposal process. 

Number of Grants: 

Fourteen grant proposals were approved in the first round of awards (to 13 organizations); based 
on the average award, it is anticipated that there will be an additional 7 to 10 grants awarded in 
the second round, for a grand total of up to 23 grants. 

Administrative Need for Three Positions 

Based on the workload described, we feel it is necessary for the success of this program to hire 
three grant coordinators to oversee the program. All three coordinators would work directly with 
grantees providing project management as well as act as liaisons to various city departments, 
Commissions and community organizations. The grants will be divided between the three 
coordinators. 

Grant Coordinators 

The main duties of the grant coordinators will involve administrative oversight of the grants. One 
coordinator will be responsible for all of the fiscal duties listed below. The duties of these 
positions include but are not limited to the following activities: 

• The coordinators are responsible for administrative oversight of the assigned grants. This 
includes of negotiation of scope of work, budget, payment schedule, schedule of reports, and 
preparation of contract agreements with grantees. 

• Acting as primary point of contact with grantees, the coordinators have the responsibility of 
ensuring that projects are completed as proposed, meeting timeline goals and projections. 
Coordinators are expected to identify problem areas with specific projects and assist in 
identifying solutions. The coordinators will be available to grantees to provide accounting 
and budgetary assistance as required. 

• The coordinators are also responsible for coordination of technical oversight for grants as 
needed. This includes assessing need for assistance, creation of technical consultant's scope 
of work, creation and solicitation of RFP, selection of technical consultant, negotiation of 
contract, and oversight of technical contractor's work. 

• The coordinators are responsible for conducting regular site visits to monitor progress, 
acquire any necessary photos or documentation and verify that invoices submitted for 
payment reflect the work completed. 

• The coordinators are responsible for collecting information from grantees on the status of 
projects and reporting on progress. The coordinators will then prepare, compile and 



Source: Department of the Environment 



Attachment I 
Page 3 of 5 

distribute reports to the public, various departments, the Board of Supervisors, arid the Mayor 
for each grant project, including progress reports and final summaries. 

• The coordinators will act as primary liaisons for selected grantees with the Commission on 
the Environment, the Department of the Environment, the Mayor's Office, the Board of 
Supervisors, various City departments and the general public. 

• The coordinators are responsible for coordination of second grant process for the remaining 
53,084,879 in grant funds, and overseeing and organizing community workshops and 
meetings. Duties will include assessing community needs through community meetings, 
preparation of the guidelines for this second process, assisting in the development of criteria, 
creation of a selection panel of grantees, distribution of application materials and other 
background materials, review of proposals and letters of intent and other application 
materials, coordination with Commission members and other Department of the Environment 
staff during the selection process, contract negotiations of next group of grantees, and 
eventual award and administration and oversight of the grants. 

• The coordinators are also responsible for fiscal oversight of all 13 grants and the anticipated 
additional 7- 1 more from the second grant process. 

• Review and processing of monthly and other invoices from grantees. Including verification of 
all fiscal documentation such as invoices, cancelled checks and other related documents. 
Also verification of eligible expenses. 

• Ensuring regular payment to grantees, including on-line FAMIS approval of payment 
processing. Also review of grantee budgets, payments and modifications. 

• The coordinators are responsible for the creation and maintenance of a database of grantees 
including contact information and also accounting and other financial records tracking all 
expenses and available funds for each individual grantee. 

• Preparation of periodic budget and financial reports on grants program. Review of grantee's 
fiscal documentation and evaluate progress during site visits. Also, will provide fiscal reports 
on these site visits, either through the regular reports to the Commission, or separately as may 
be warranted. 

• The coordinators are responsible for preparing, compiling and distributing reports for each 
grant project, including quarterly and annual progress reports and final summary report for 
distribution to the public through the Department of the Environment and the Commission on 
the Environment. 

• The coordinators will act as primary liaison for selected grantees with the Commission on the 
Environment, the Department of the Environment, the Mayor's Office, the Board of 
Supervisors, and the general public. 

The budget for grant administration is 10% of the grant amount. For the $13 million dollar grant 
program, the administrative budget will be SI. 3 million dollars. 

The budget includes overhead costs for the three staff people as well as line items for additional 
technical expertise, consultants, reports and evaluation. 

Justification of .2 b'LE of Deputy Director and .1 FTE of Commission Secretary'. 

The scope of work for the Deputy Director of the Department of the Environment includes but is 
not limited to the following activities: supervision of all grant staff activities; liaison to Board of 
Supervisors for grant program; and fiscal oversight of grant program. 

The scope of work for the Commission Secretary of the Commission on the Environment 
Department of the Environment includes but is not limited to the following activities: reporting to 



Source: Department of fee Environment 
85 



Attachment I 
'ir'age 4 o£ 5 



the Commission on the Environment; preparing written reports for the Commission and the 
public; and posting and updating grant information on the Department's web-site. 

The time allocation is based on a comprehensive evaluation of the amount of time devoted by 
Department staff to the granting process to date, as well as the amount of time that will be 
required to conduct a second granting process; monitoring and supervising the grant process and 
grantees; and preparing and presenting reports and evaluation during the three year grant 
program. 

General fund savings from the allocation of time for the Deputy Director and the Commission 
Secretary is being built into our 200 1-2002 budget submitted to the Mayor's Office. 

Rental costs are based on renting additional space - our current office space cannot accommodate 
the additional staff - and therefore the rental income will not reduce our general fund 
requirements. 

Administrative cost for each year 

Administrative costs comprise the budget necessary to operate the grant program. Expense 
categories include rent, equipment, legal services, and other program-related costs. Over the 
three-year life of the grant program, 2001-2004, these figures total 5189,626, $167,281, and 
$168,102. Please see Attachment V budget for details. 

Description of how Technical Assistance and Evaluation costs will be spent. 

Some of the projects recommended for funding are of an advanced technical nature, including the 
installation of solar power generators, and extensive energy-saving retrofits to existing buildings. 
In order to ensure the success of each project, there is $50,000 allocated per year for technical 
assistance. These funds will be used for assistance with specific projects on an as needed basis: 
for example, in installing solar panels, or to evaluate whether a particular project is maximizing 
energy savings potential. The Commission on the Environment recommends that any unspent 
funds earmarked for technical assistance and evaluation be returned to the Environmental Health 
and Energy fund for future grants. Cost estimates for Technical Assistance and Evaluation are 
based on the following projected needs for grant administration: 

• Energy-related projects for the current grant cycle would require technical consultant(s) at a 
rate of approximately $105/hour for 816 hours spread over three years = $85,680. The 
consultants) would be responsible for recommending and assessing energy-efficient designs 
for alternative energy projects i.e. solar power systems. The consultant(s) would also make 
recommendations on energy-saving measures and implementation. 

Assuming that the second REP process would bring in a proportionate number of energy- 
related projects, we estimate that an additional $30,683 would be needed for technical 
consultant(s) for those projects. 

• Energy-related projects for the current grant cycle requiring special equipment i.e. 
photovoltaic panels or solar water heaters would require technical consultants at a rate of 
approximately $130/hour for 300 hours spread over three years = $39,000. The consultants 
would perform measurement verification of equipment and would review and assess I 
equipment training and provide assistance in maintenance and monitoring. 



Source: Department of the Environment 



Attachment I 
Page 5 of 5 



Assuming that additional energy-related projects with equipment would be accepted in the 
second RFP process, we estimate that an additional 513,966 would be needed for technical 
consultant(s) for those projects. 

Green building projects for the current grant cycle would require expertise from a green 
building consultant at a rate of approximately S95/hour for 120 hours for the three year period 
= $1 1,400. The consultant would recommend the approach for design of the green building 
projects, advise grantees on aspects of green building that should be incorporated into their 
projects and inspect progress and completion of green buildings. 

Assuming that additional green building projects would be considered in the second RFP 
process, another S4,082 should be set aside for those projects. 

Construction projects and capital improvement projects would require technical expertise for 
reviewing architectural plans, conducting site inspections, and ensuring timely progress of the 
projects. Consultants may need an engineering background. These consultants would charge 
approximately SI 15/hour for 738 hours for the three year period = S84,870. 

Assuming that additional construction-related projects would be considered in the second 
RFP process, another S30.393 would be set aside for those projects. 



g 7 Source: Department of the Environment 



Attachment II 
Page 1 or. 2 



FUNDING RECOMMENDATIONS 



Organization/ Agency 


Funding Request 


Funding 
Recommendation 


Project Description 


Jl Hallows Garden 


S 300,000 


_... 


Rehabilitate the units of All Hallows Garden 
through audits of mold/ mildew and advocacy of 
property owners. 


[etch Hetchy: Alternative 
immunity Energy (ACE) 


$ 2,266,220 


S 1,500,000 


Reduce reliance of fossil fuels via implementing 
weatherization retrofits, alternative energy 
systems and training residents in energy 
conservation. Design/install systems and create 
jobs in energy efficiency and design, installation 
and maintenance of alternative energy facilities. 


yc Ecology/ Community 
Vindow 


5 396,911 


$396,911 


Creation of a "Community Window" center that 
posts information on status of the Shipyard clean 
up, Parcel E remediation, community emergency 
alert and job opportunities. Also will provide an 
information center for documents and 
information related to the community concerns. 


\rc Ecology/ Landfill 


S 484,996 




Develop ecological restoration concept analyze 
technical feasibility of removing the landfill from 
Parcel E, develop funding plans, and involve the 
community in remedy and land use planning. 


)epartment of Public 
lealth 


$ 330,000 


$ 330,000 


Increase awareness of health care services, 
promote preventive care measures, and enroll 
residents in existing free or low-cost health care 
plans. Provide one-on-one assistance to residents 
at local community centers and enroll residents. 
Distribute literature to residents re: enrollment 
opportunities. 


rarden Project 






Did not submit their grant proposal before 
deadline. 


freenaction 


$ 499,999 


S 150,000 


Empower community to play a role and make an 
impact on the neighborhood through outreach, 
education and advocacy for the following: The 
shutdown of power plant, cleanup of superfund 
sites, an education campaign to promote an 
overall environmental agenda. 


iealth and Environmental 
J5Source Center 


$ 2,048,803 


S 500,000 


The cornerstone of the project is the facility 
expansion of the Southeast Health Center. Also 
expansion of the current services of the Breathing 
Count Program and Breast, Cervical and Prostate 
Cancer programs. 


busing Conservation & 
bvelopment Corporation 


S 499,853 


$ 300,000 


Improve housing in the Bayview Hunter's Point 
and Potrero Hill areas through energy retrofits, 
energy-efficient appliance replacement and 
conservation measures. Scope includes a 
minimum of 120 units per year to get an audit, 
installation and complete upgrade when 
necessary. 


I teracy for Environmental 
J;tice 


S 897,942 


S 897,942 


Creation "Living Classroom" at Heron's Head 
Park, which would serve as an ecological 
education center and community meeting place. 
The center would be a green building aiming to 
reduce, reuse and recycle water, energy, and 
materials when able to meet the goal of producing 
100% of its energy on site. 






DO 











• 

Attachment II 
Page 2 or 2 


M. Cubed 


S 2,500,000 


S 1,500,000 


Creation of an energy-cooperative Education of 
energy reduction measures. Train residents on 
co-op jobs such as community organizing, energy 
audits and installation 


Potrero Hill Neighborhood 
House 


$ 475,000 


S 475,000 


Conduct an energy retrofit of this neighborhood- 
serving building to lower the load of energy use. 
Through monies saved on electricity bills from 
the retrofits, there would be more funds available ' 
for programs offered to the community. The 
project would include complete weatherization, 
installation of photovoltaic systems and other 
alternate energy resources systems. 


San Francisco 
Conservation Corp. 


S 795,529 





The project proposes to enroll youth into a 
training program to teach them job training skills 
in environmental health, community advocacy 
and neighborhood beautification. Also aims to 
improve environmental quality through 
neighborhood improvement projects. 


Strybing Arboretum 


S 1,886,961 


S 1,500,000 


Enroll/educate residents in horticulture program 
to enable entry into careers in gardening. 
Improvement to parks/open spaces through 
training portion of project by the participants. 


Terra Tech/Potrero Middle 
School 


$ 355,540 


S 355,540 


Installation of solar paneling and windmills to the 
Potrero Hill Middle School with an interactive 
education classroom on alternative energy 
sources, exhibits, and a computer that will 
measure the electrical output from the solar and 
wind systems. 


Trust for Public Land 


S 400,000 


S 300,000 


India Basin Shoreline transformation into 
waterfront recreational facility. This project will 
be a two-phase process. Phase one has been 
funded by other sources to include playground, 
basketball court, landscaping, picnic tables and 
benches. Request to fund phase to from COE 
include the installation of interpretive signage, 
restrooms and a cirinkine fountain. 


Young Community 
Developers 


$ 499,999 


S 409,000 


Operate an MBE/WBE environmental services 
business that will employ residents and provide 
environmental services. The training will consist 
of mold/mildew and other asthma trigger audits, 
lead and asbestos sampling and abatement, 
landfill, soil, and other hazardous material 
analysis. YCD will target environmental 
consulting firms, developers and City 
Departments for job placement 


Total | 514,637,753 


$8,614,393 





Total Grant Amount 513,000,000 

Recommended Funding for Grantees 5 8,614,393 

Administrative Budget (approx. 10%) 5 1,300,728 

Balance Remaining (EHE Initiative) 5 3.084.879 

TOTAL 513,000,000 

89 



Attachment III 



Chapter 324 Stats. 1998 (Trailer Bill for CPUC Budget) 

S13 Million State Appropriation to the 

City and County of San Francisco 

513,000,000 shall be expended for the support of the City and County of San Francisco, with 

I) 53,000,000 to be used to 

a.) mitigate community issues 

b.) avoid environmental impacts arising from the sale of the Potrero powerplant by the 
Pacific Gas and Electric Company 

II) 51 0,000,000 to be used by the City and County of San Francisco for infrastructure 
associated with the shut down of the Hunters Point powerplant or the sale of the Potrero 
powerplant. 



Organization 


Source of Funds 


Amount 


Hetch Hetchy: Alternative Community Energy 
(ACE) 


n 


51,500,000 


Arc Ecology 


I 


S396,911 


Department of Public Health 


II 


5330,000 


Green Action 


n 


5150,000 


Health and Environmental Resource Center 


n 


5500,000 


Housing Conservation and Development Corporation 


n 


5300,000 


Literacy for Environmental Justice 


n 


5897,942 


M. Cubed 


n 


51,500,000 


Potrero Hill Neighborhood House 


n 


5475,000 


Strybing Arboretum 


i 


51,500,000 


Tetra Tech/ Potrero Middle School 


Ln 


5355,540 


Trust for Public Land 


i 


5300,000 


Young Community Developers 


i 


5409,000 



Total from I: 
Total from II: 

Grant Total: 

Administrative Budget: 

Balance Remaining: 

TOTAL 



S2,605,911 
6.008.482 

58,614,393 

1,300,728 

3.084.879 

$13,000,000 



90 



Source: Department of the Environment 



Attachment IV 



TIMELINE 

The timeline for grant completion from this initial granting process are as follows: In June 30, 
2002, four grants will be completed. In June 30, 2003, three additional grants will be completed. 
In June 30, 2004. the six remaining grants will be completed. 

The number of grants completed and the schedule for their completion, as outlined in the table 
below, does not include the additional grants, which will be determined by the subsequent RFP 
process. The timeline for grantees not yet selected from the second granting process will be 
administered from July 1, 2002 - June 30, 2004. Again, the Department of Public Health, 
Supervisor Sophie Maxwell and the EHE initiative will drive this subsequent process. 



One Year Awards 

July 1,2001 -June 30, 2002 


Two Year Awards 

JulYl, 2001 -June 30, 2003 


Three Year Awards 

July 1, 2001 - June 30 2004 


Tetratech 


Department of Public Health 


ArcEcology 


Trust for Public Land 


Hetch Hetchy 


HERC 


Young Community Developers 


Strybing Arboretum 


HCDC 


Potrero Hill Neighborhood House 


GreenAction 


Literacy for Environmental Justice 






M.Cubed 



APPLICANTS REQUESTING S500.000 OR MORE 



Applicant 


Citv Department Partner 


Amount Allocated to Citv Department 




Strybing Arboretum 


Department of Public Works 
Rec & Park Department 


5145,816 
5959,979 


Health and Environmental 
Resource Center 


Redevelopment Agency 


No Funds Allocated 


Literacy for Environmental 
Justice 


Port 


No Funds Allocated 


M. Cubed 


Department of the Environment 


565,000 


* Hetch Hetchy (ACE) 


Hetch Hetchy 


51,500,000 



This City Departments is identified as the project lead but may be 
sub-contracting work to other organizations, therefore some funds would be 
disbursed to other organizations. 



91 



Attachment V 
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97 



Attachment VI 



REMAINING FUNDS 

In March 2001, Mayor Willie L. Brown, Jr. directed Dr. Mitch Katz, as head 
of the Department of Public Health (DPH), to convene a series of meetings 
of Department Heads to address the severe health problems of the Bayview 
Hunter's Point community. Supervisor Sophie Maxwell agreed to chair the 
meetings. After four meetings, several priority areas were identified in the 
areas of Environmental Health and Energy. The group will next convene in 
the Bayview Community to receive public input. 

The Department of the Environment recommends that the remaining 
$3,084,879 from the $13,000,000 state-appropriation for environmental 
mitigation be transferred to the Department of Pubic Health to establish an 
Environmental Health and Energy Fund. In addition to the priority areas 
from the emergency task force meetings, the goals set forth in the EHE 
Initiative will be used as guidelines for funding. The funds will remain on 
reserve at DPH until an RFP process is developed and grantees are 
recommended to the Finance Committee of the Board of Supervisors. 

Dr. Mitch Katz has agreed to spearhead the effort to disburse the remaining 
monies. Dr Katz will be assisted by one of the three grant coordinators 
working out of the Department of the Environment. We anticipate within the 
next few months we will solicit community input, develop an RFP and 
established the exact priority areas for funding. By approximately the first 
of November we hope to have identified prospective grantees and have 
finalized recommendations for the Finance committee. The grant 
administration for the additional grantees will then be assumed by the three 
grant coordinators at the Department of the Environment. 



QR Sniirr.p- Ofnarhnpnt of tVir 'pTivnTi-irnn-nt 



Attachment VII 



Outreach Efforts 

To ensure that all organizations received information about the grants and how to apply we 
outreached through several channels. We first held community meetings in the Bayview and 
Potrero Hill to announce that there would be a granting process and that initial applications would 
be available on December 5, 2000. When the initial applications were available, they were e- 
mailed to the 284 members on the Commission on the Environment's e-mail list which includes 
community groups, environmental advocacy groups, City Departments, and all members of the 
public that have signed in at Commission meetings. Copies of the initial application were made 
available at the Department of the Environment, the San Francisco Library, the Bayview 
Community Advocates office, the Southeast Health Center, and the Potrero Hill Neighborhood 
House. 

We also sent out a mass mailing announcing that the applications were available and where they 
could be retrieved. This mass mailing went to 162 people and an additional 109 people from the 
Environmental Health and Energy mailing list were informed. Press releases were sent out to over 
100 media outlets and this announcement was posted on the Commission on the Environment's 
Web-Site as well. Over 1,000 flyers were distributed throughout the Community on cars and bus 
stops, in stores and businesses, and posted on lightposts and telephone polls and throughout 
housing developments. Announcements were also printed in three newspapers: The Bay View, 
The Independent and the Examiner. 



9 9 Source: Department of the Environment 



Attachment VIII 



The Department of the Environment accepted grant proposals from all organizations 
including nonprofits, for-profits and City agencies. In accordance with the State 
appropriation legislation, all organizations were asked to illustrate how their projects or 
programs would mitigate community issues, avoid environmental impacts arising from 
the two power plants in the Hunters Point and Potrero Hill neighborhoods, or create 
infrastructure in the two communities. The application packet for both the letter of intent 
and the complete proposal stated that community involvement, consensus building 
activities and collaboration with different community organizations would be considered 
in the selection process. These statements were included to ensure that for-profit 
organizations would make a concerted effort to involve the two co mmun ities in their 
projects. 



^or-Profit Organizations 


Nonprofit Organizations 


Government Agencies 


retratech 


Literacy for Environmental Justice 


Hetch Hetchy 


fcCubed 


HERC 


Department of Public Health 




ArcEcology 






Strybing Arboretum 






GreenAction 






Potrero Hill Neighborhood House 


- 




Trust for Public Land 






Young Community Developers 






HCDC 





100 



Source: DcDartmcnt of the Environment 



Attachment IX 



TO: Maureen Singleton 

FROM: David Assmann 

DATE: May 3, 2001 

RE: Delay in Disbursement of 513,000,000 State Appropriation 

Although the State appropriation was secured in the Fall of 1998, the Department of the 
Environment only became involved in this process in the Fall of 1999. We have no information 
on the planning of this process or what activities took place between the Fall of 1998 and the Fall 
of 1999. We cannot comment on why there was a delay prior to our involvement in this granting 
process. 

Our involvement began in Fall of 1999 when Mayor Brown directed the director of the 
Department of the Environment (DoE), in collaboration with MOED, to develop a program to 
disburse the funds to the community. DoE and MOED proceeded to comply with the Mayor's 
directive. The Commission on the Environment established an Environmental Health and Energy 
Ad Hoc Committee (EHE Committee) to discuss the State appropriation and to advise DoE and 
MOED in developing the grant process. 

In accordance with the intent of the State appropriation legislation (i.e. to alleviate environmental 
and health-related burdens of the Bayview/Hunters Point and Potrero communities), the EHE 
Committee, DoE, MOED instituted an open, inclusive, and community-driven process. From 
Fall of 1999 to date, the two departments have held several community meetings and developed 
and implemented a two-phase grant process with guidelines that were based on community input. 
Both phases of the grant program were approved by the EHE Committee. 



101 

Source: Denartment of the F.nvfmnmpnt 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Item 10 - File 01-0686 

Department: Recreation and Park 

Item: Resolution approving and authorizing a First 

Amendment to a Lease with Theatre Bay Area, a 
California nonprofit public benefit corporation, 
related to certain ticket kiosk premises located on 
Union Square, allowing for the lessee to vacate the 
original ticket kiosk premises, relocate temporarily 
to other premises and consent to the demolition of 
the original kiosk improvements; and authorizing 
and ratifying the execution and delivery by the 
General Manager of the Recreation and Park 
Department of the First Amendment and any 
related documents, and the taking of such actions 
by said General Manager as may be necessary in 
furtherance of this resolution. 

Purpose of Lease: First Amendment to an existing ground lease 

agreement 

Lessor: City and County of San Francisco acting through 

the Department of Recreation and Park 

Lessee: Theatre Bay Area, a nonprofit public benefit 

corporation 

No. of Square Feet and 

Cost Per Month: From December 1, 1992 through March 25, 2001, 

the Theatre Bay Area, a nonprofit public benefit 
corporation, leased from the Recreation and Park 
Department approximately 220 square feet on the 
Stockton Street side of Union Square at $105 per 
month ($1,260 annually), which was approximately 
$0.48 per square foot per month or approximately 
$5.76 per square foot annually. This ground space 
was for an outdoor kiosk owned by the Theatre Bay 
Area on the edge of the sidewalk on the eastern 
side of Union Square. The Theatre Bay Area used 
this space to sell, market and distribute tickets to 
various events and activities. 

Under the proposed First Amendment to the 
original lease agreement, the Theatre Bay Area 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

102 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



would relocate for approximately 17 months, 
retroactive from March 25, 2001 through August 
2002, from its 220 square feet of outdoor space on 
the Stockton Street side of Union Square to the 
first level of the underground Union Square Garage 
to occupy approximately 461 square feet at $105 
per month ($1,260 annually), which is 
approximately $0.23 per square foot per month or 
approximately $2.76 per square foot annually. 

The Theatre Bay Area moved from the outdoor 
kiosk space to the first level of the Union Square 
Garage on March 25, 2001, prior to Board of 
Supervisors approval of the proposed First 
Amendment. 



Annual Rent Payable 
by Theatre Bay Area 
to the City: 



Percentage Rent: 



$1,260 annually. According to the original lease 
agreement dated December 1, 1992, this base 
monthly rent does not have any annual rental 
increases. As of the writing of this report, the 
Recreation and Park Department was unable to 
provide the Budget Analyst with an explanation for 
why no annual increase in rent was included in the 
original lease. 

In addition to the minimum basic rent noted above, 
the Theatre Bay Area is required to pay the City 5 
percent of the amount by which Annual Net Service 
Charges collected by the Theatre Bay Area exceeds 
the base amount of $160,000. Annual Net Service 
Charges are the gross receipts of business 
conducted on the premises less costs. According to 
Mr. Chris Mack of the Recreation and Park 
Department the Annual Net Service Charges 
collected by the Theatre Bay Area exceeded the 
base amount of $160,000 during one year of the 
existing lease, fiscal year 1996-1997, when Annual 
Net Service Charges exceeded the base amount by 
$11,173. During fiscal year 1996-1997, percentage 
rent paid by Theatre Bay Area to the City totaled 
$558.65 (5 percent of $11,173). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Utilities and Janitor 
Provided by Lessor: 



Term of Lease: 



Description: 



Paid by tenant 

10-year lease that commenced December 1, 1992 
and terminates November 30, 2002 

According to Mr. Mack, the City entered into a 
lease on December 1, 1992 with Theatre Bay Area 
for approximately 220 square feet of outdoor space 
on the Stockton Street side of Union Square. Mr. 
Mack advises that the Board of Supervisors 
approved this lease in 1992. The term of the lease 
was for five years, with an option to the Theatre 
Bay Area to extend the initial term for an 
additional five years. The Theatre Bay Area 
exercised its option to extend the lease on July 23, 
1997, to become effective on December 1, 1997. The 
expiration of the additional five-year term is 
November 30, 2002. 

Mr. Mack reports that the Theatre Bay Area 
previously used the outdoor kiosk space and 
currently uses the indoor space on the first level of 
the Union Square Garage for the sale, marketing 
and distribution of tickets for performing arts, 
theater, amusement and family related events and 
activities. The Theatre Bay Area also distributes 
free of charge theater directories, tourism 
information and public transit maps. Mr. Mack 
advises that the Theatre Bay Area is funded by 
ticket sales and private donations. 

On February 22, 1999, the Board of Supervisors 
approved a lease agreement between the City and 
the Uptown Parking Corporation, a nonprofit 
corporation, for the Uptown Parking Corporation to 
lease and maintain the Union Square Garage (File 
98-2131). 1 Under the terms of such lease, the 
Uptown Parking Corporation has already 
demolished the original outdoor kiosk occupied by 
the Theatre Bay Area in order to make various 
improvements to the Union Square Garage and 



1 The Uptown Parking Corporation has an agreement with San Francisco Parking, Inc. to 
operate the Union Square Garage. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

104 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Union Square Park, including constructing a new 
pavilion on the Powell Street side of Union Square. 
The source of revenue for improvements the Union 
Square Garage and the Union Square Park are 
1999 Parking Revenue Bonds, approved by the 
Board of Supervisors on March 5, 1999 (File 98- 
2131). According to Mr. Mack, the pavilion will 
include a 510 square foot space designed for a 
concessions operation, along with an additional 420 
square feet that for a visitors center, a total of 930 
square feet. 

Under the proposed First Amendment to its 
existing lease, the Theatre Bay Area would be 
authorized, on a retroactive basis, to move from the 
220 square feet of outdoor space on the Stockton 
Street side of Union Square for improvements to 
Union Square Park to be made by the Uptown 
Parking Corporation. As previously noted, this 
move occurred on March 25, 2001. The First 
Amendment would also retroactively authorize the 
Theatre Bay Area to relocate temporarily to 461 
square feet of space on the first level of the Union 
Square Garage, which is owned by the City and 
leased to the Uptown Parking Corporation, while 
Union Square is renovated and a new pavilion is 
built. Under the proposed First Amendment to the 
Lease, the Theatre Bay Area would be authorized, 
on a retroactive basis, to: (1) vacate the existing 
outdoor kiosk and relocate from March 25, 2001 
until the earlier of the date that the pavilion is 
substantially complete and ready for occupancy or 
November 30, 2002, the end of its leasehold, to 461 
square feet of space located on the first level of the 
Union Square Garage; and (2) consent to the 
demolition of the outdoor kiosk. 

According to Mr. Mack, on March 25, 2001 the 
Uptown Parking Corporation entered into a 
sublease agreement with the Theatre Bay Area to 
permit the Theatre Bay Area to occupy the 
proposed temporary space in the Union Square 
Garage. Under the sublease agreement between 
the Theatre Bay Area and the Uptown Parking 
Corporation, which is not subject to Board of 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

105 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 

Supervisors approval, according to Ms. Mariam 
Morley of the City Attorney's Office, the Uptown 
Parking Corporation authorizes the Theatre Bay 
Area to occupy temporarily the 461 square feet of 
space on the first level of the Union Square Garage 
while the new pavilion is being constructed. The 
Theatre Bay Area is occupying temporarily this 461 
square feet of space at the same rental rate of $105 
per month as has been paid under the, existing 
lease with the Recreation and Park Department. 
The rent is paid to the Recreation and Park 
Department with no rent being paid to the Uptown 
Parking Corporation. 

Under the proposed First Amendment to the 
existing lease between the Recreation and Park 
Department and the Theatre Bay Area, the Theatre 
Bay Area would occupy the proposed temporary 461 
square feet of space in the Union Square Garage 
until the earlier of the following: 

(a) the date that the new pavilion is 
substantially complete and ready for 
occupancy by the Theatre Bay Area; 

(b) the expiration date of the existing lease with 
the Recreation and Park Department, which 
is November 31, 2002; or 

(c) the date as of which the Sublease Agreement 
between the Uptown Parking Corporation 
and Theatre Bay Area expires or terminates. 

Under the sublease agreement between the 
Uptown Parking Corporation and the Theatre Bay 
Area, the sublease agreement expires or terminates 
on the earlier of the following: 

(a) 15 days after the substantial completion of 
the construction of the pavilion; or 

(b) November 30, 2002. 

Comments: 1. According to Mr. Mack, construction of the new 

pavilion is anticipated to be completed by August of 
2002. Upon completion of renovation of the Union 
Square Garage by the Uptown Parking 
Corporation, the Theatre Bay Area would move 
from the first level of the Union Square Garage to 
510 square feet of new pavilion space on the Powell 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

106 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



Street side of Union Square under its existing lease 
with the Recreation and Park Department. Mr. 
Mack reports that the estimated fair market value 
of the 510 square feet of pavilion space is between 
$10 and $20 per square foot per month which 
would result in total annual rent of between 
$61,200 and $122,400 payable by the Theatre Bay 
Area, or another business which enters into a new 
lease with the Recreation and Park Department for 
the pavilion when the Theatre Bay Area's lease 
expires on November 30, 2002. 

2. Mr. Mack and Mr. Gerald Romani of the Real 
Estate Division could not provide any information 
regarding fair market value rent being paid by the 
Theatre Bay Area under the existing lease. Mr. 
Romani advised that the Real Estate Division has 
not been involved with this subject lease. 

3. When the existing lease between the City and 
Theatre Bay Area expires on November 30, 2002, 
according to Mr. Mack, the City would enter into a 
new lease for the entire 930 square feet of pavilion 
space which includes space for a concessions 
operation and a visitor center and rent would be set 
at fair market value, as determined by a 
competitive bidding process, with annual increases 
in rent based on Consumer Price Index 
adjustments. 

4. As previously noted, on March 25, 2001, the 
Theatre Bay Area entered into a sublease 
agreement with the Uptown Parking Corporation 
to permit the Theatre Bay Area to occupy the 461 
square feet of space on the first level of the Union 
Square Garage. The Theatre Bay Area vacated the 
original outdoor kiosk on the Stockton Street side 
of Union Square on March 25, 2001 and relocated 
to the first level of the Union Square Garage. 
According to Ms. Morley, the City's lease with the 
Uptown Parking Corporation allows the Uptown 
Parking Corporation to sublease space in the 
garage to retail or commercial uses if that space is 
unsuitable or unnecessary for parking. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

107 



Memo to Finance Committee 

May 9, 2001 Finance Committee Meeting 



5. According to Ms. Morley, approval by the Board 
of Supervisors of the proposed First Amendment to 
the existing lease ratifies all actions taken to date 
by the Recreation and Park Department. 



Recommendation: 



Approval of the proposed resolution is a policy 
matter for the Board of Supervisors. 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



Harvey M. Rose 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

108 



Sent By: hP LaserJet 3100; 



4155547714; 



Apr-19-01 4:14PM; 



Page 1 /1 



BOARD of SUPERVISORS 







City Hall 
Dr. Carlton B. Good left Place, Room 244 
San Francisco 94102-4689 
IHI TeL No. 554-5184 

r g/ Fax No. 554-5163 

TDD/TTY No. 544-5227 



NOTICE OF SPECIAL OFF SITE MEETINGS 
* FINANCE COMMITTEE 
Board of Supervisors 



Notice is hereby given that the Finance Committee of the Board of Supervisors of the City and 
County of San Francisco, will hold special meetings in the community to receive public input on the City 
and County of San Francisco 2001-2002 Budget as follows: 

Saturday, May 12, 2001; 10:00 a.m. 
James Denman Middle School 
241 Oneida Street* 

Wednesday, May ".6, 2001; 7:00 p.m. 
Stonestown YMCA, Lane Senior Annex 
3150 20 th Avenue* 

Thursday. May 17, 2001; 7 p.m. 
Everett Middle School 
450 Church Street* 

Saturday, May 19, 2001; 12:00 p.m. 
Southeast Community Facility 
1600 Oakdale Avenue* 

Wednesday, May 23, 2001 ; 7 p.m. 
George Moscone Elementary School 
2576 Harrison Street* 

Wednesday, May 30, 2001; 5:30 p.m. 
Tenderloin Police Station 
301 Eddy Street* 

Thursday, May 31, 2001, 6:30 p.m. 
Newcomer High School 
2340 Jackson Street* 

If a quorum of the Finance Committee members are not present, Supervisor Mark Leno will hold 
a town hall meeting for the purpose of receiving community input on the City and County of San 
Francisco 2001-2002 Budget. 



DOCUMENTS DEPT. 

APR 1 9 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: Other special off-slta meetings will be held during the month of May 2001. 

These meetings are pending Board of Supervisors action on Monday, April 23, 2001. 




GjiORIA L. YOU , 
Clerk of the Board 



City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: GailJohnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, May 16, 2001 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:10 a.m. 

010734 [Sale of surplus property under the jurisdiction of PUC to San Mateo County] 

Resolution authorizing and approving the agreement of sale of a permanent non-exclusive easement of City- 
owned property located in an unincorporated area of San Mateo County being a portion of Lot 9, Assessor's 
Block 23, located near Esther Lane and Hillcrest Drive, near Redwood City, in the Oak Knoll Manor District to 
the County of San Mateo. (Real Estate Department) 
4/19/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Legnitto. Real Estate Division. 
Department of Administrative Services. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010764 [Lease of Property] 

Resolution authorizing the lease of real property at 3120 Mission Street for the Department of Human Services. 
(Real Estate Department) 

(Fiscal impact; District 9) 

4/25/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Steve Legnitto. Real Estate Division. 

Department of Administrative Services; Tony Lugo, Employment Sen'ices Director. Department of Human 

Services; Rose Chow, Facilities Manager, Department of Human Services. 

Amended on page 1, line 15, by deleting "of no less than 7,650 s.f" Further amended on page I. line IS, by 

replacing "to offset costs and the common use of space" with "that shall increase annually in accordance with 

CP1 adjustments to the City's base rent. " 

AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:24 ru OH 3 3 94 



Finance Committee 



Meeting Minutes 



May 16, 2001 



010730 [Reserved Funds, Department of Parking and Traffic] 

Hearing to consider release of reserved funds, Department of Parking and Traffic (fiscal year 2000-01 budget), 
in the amount of $173,741 to cover anticipated overrun in overtime expenditures of the department's 
Enforcement Division. (Parking and Traffic Department) 
4/18/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Julia Dawson, Department of Parking and 
Traffic. 

Release of reserved funds in the amount of $173,741 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010738 [Lease of Star Hotel] 

Supervisors Ammiano, Peskin, Newsom 

Resolution authorizing and approving the lease by and between the City and County of San Francisco, for the 
Department of Public Health, as Tenant, and Sonali Holdings, LLC, as Landlord, for the Star Hotel located at 
2176-2178 Mission Street. 

(Fiscal impact; District 9.) 

4/23/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Marc Trotz, Department of Public Health. 
Supervisor Peskin added as co-sponsor. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010760 [Reserved Funds, Department of Public Health] 

Hearing to consider release of reserved funds, Department of Public Health (File 002010 - AB2034 Grant 
Funds, Resolution No. 1033-00), in the amount of $490,667 to fund property management services by the John 
Stewart Company at two facilities located at the Star and Camelot Hotels for seriously mentally ill and 
dual/multiply diagnosed adults. (Public Health Department) 
4/27/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Marc Trotz, Department of Public Health. 
Release of reserved funds in the amount of $490,667 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



01 0729 [Reserved Funds, Department of Public Health] 

Hearing to consider release of reserved funds, Department of Public Health (fiscal year 2000-01 budget), in the 
amount of $3,371,740 to fund the programming and planning phase of the Laguna Honda Hospital 
Replacement Program. (Public Health Department) 
4/19/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Michael Lane, Department of Public Works. 
Release of reserved funds in the amount of $3,371, 740 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:24 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



May 16, 2001 



010761 [Reserved Funds, Department of Public Health] 

Hearing to consider release of reserved funds, Department of Public Health, (Ordinance No. 308-98, Mangini 
settlement revenue), in the amount of $20,000 to continue funding of an existing Health Educator position in 
the Mangini budget for the period March 2002 through June 2002. (Public Health Department) 
4/23/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer, 
Department of Public Health. 

Release of reserved funds in the amount of $20,000 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010506 [Supplemental Appropriation] 
Supervisor Peskin 

Hearing regarding upcoming supplemental appropriations comprised of a report by the City Controller on 
supplemental budgetary items, reprogramming of funds within Departments, and other previously unforeseen 
fiscal actions by City Departments that will be brought before the Finance Committee. 
3/19/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Edward Harrington, Controller; John Bardis. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010549 [Appropriation, funding for uniform firefighters and investigators overtime] 

Ordinance appropriating $2,991,267 from the General Fund Reserve and various departmental revenues to 
fund the cost of uniform firefighters and investigators overtime in the Fire Department for fiscal year 2000-0 1 . 
(Controller) 

(Fiscal impact.) 

3/28/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Chief Tobacco, Fire Department; Jim 

Corrigan; Edward Harrington, Controller. 

Amended on page 1 as follows: On lines 2 and 25, by replacing "$2,991,267" with "$2,160,476"; on line 11, 

by replacing "$1,626,267" with "$795,476"; and on line 22, by replacing "$2,486,267" with "$1,655,476." 

Continued to 5/23/01. 

AMENDED. 

Ordinance appropriating $2,160,476 from the General Fund Reserve and various departmental revenues to 

fund the cost of uniform firefighters and investigators overtime in the Fire Department for fiscal year 2000-01. 

(Controller) 

(Fiscal impact.) 

CONTINUED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:24 r\l OK J I 04 



Finance Committee 



Meeting Minutes 



May 16, 2001 



010711 [Appropriation, funding the Sheriffs Department shortfalls in salary, overtime, holiday pay and 
workers compensation] 

Ordinance appropriating 52,971,186 from the General Fund Reserve to cover the shortfalls on salaries, 
overtime, holiday pay and workers compensation at the Sheriffs Department for fiscal year 2000-01. 
(Controller) 

(Fiscal impact.) 

(Supervisor Peskin dissenting in Committee) 

4/16/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Michael Hennessey, Sheriff; Jean Mariani, 

Sheriffs Department; Erin McGrath, Mayor's Office. 

RECOMMENDED by the following vote: 

Ayes: 2 - Leno, Gonzalez 

Noes: 1 - Peskin 



010781 [Appropriation, Energy Costs] 
Mayor 

Ordinance appropriating $4,032,000 of the General Fund Reserve to fund the energy costs incurred by Light, 
Heat and Power for General Fund supported departments for fiscal year 2000-01. 

(Fiscal Impact.) 

4/30/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer, 
Department of Public Health., 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010860 [Special Assistants] 
Supervisor Peskin 

Hearing to review current efforts towards reclassification of Special Assistant positions in San Francisco 
government, and to address reclassifications requested since January 1, 2001 as well as planned 
reclassifications by City Departments. 
5/7/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Andrea Gourdine, Human Resources Director; Carol Isen, Associate 
Dirctor, Professional and Technical Engineers, Local 21; John Bardis. 
Continued to 5/30/01. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



ADJOURNMENT 



The meeting adjourned at 12:49 p.m. 



City and County of San Francisco 



Printed at 2:24 PM on 3/3/04 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



D. 35 



(./of 




CITY AND COUNTY IeUB3HIJ/I OF SAN FRANCISCO 

^BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



May 10, 2001 



TO: ^Finance Committee 

FROM: , Budget Analyst 

SUBJECT: May 16, 2001 Finance Committee Meeting 



Item 1 - File 01-0734 



Departments: 



Item: 



Description: 



DOCUMENTS DEPT. 

MAY 1 5 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



Public Utilities Commission (PUC) 

Department of Administrative Services, Real Estate 
Division (RED) 

Resolution authorizing and approving the agreement of 
sale of a permanent non-exclusive easement of City- 
owned property located in an unincorporated area of San 
Mateo County, consisting of a 290 square feet portion of 
Lot 9, Assessor's Block 23, located near Esther Lane and 
Hillcrest Drive, near Redwood City, in the Oak Knoll 
Manor District to the County of San Mateo. 

According to Ms. Jean Medlar of the Real Estate Division, 
the City and County of San Francisco has owned a 697 
square foot portion of Lot 9, a landlocked parcel, in an 
unincorporated area of San Mateo County since October 
24, 1922. This triangular 697 square foot portion of Lot 9 
is referred to as Parcel Reference No. 2895 of the Bay 
Division Pipeline 1 and 2. Ms. Medlar reports that the 
subject easement area of approximately 290 square feet is 
within this 697 square foot triangular parcel of land. 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



In December of 1971, the Public Utilities Commission 
(PUC) entered into an agreement with the County of San 
Mateo for a revocable permit, allowing the County of San 
Mateo to install and maintain a sewer line measuring six- 
inches in diameter to cross through the 290 square foot 
easement area owned by the City. Under the revocable 
permit granted to the County of San Mateo by the PUC in 
December of 1971, the County of San Mateo installed and 
has since maintained the six-inch sewer line in the 
easement area. According to Mr. Gary Dowd of the PUC, 
under this permit the County of San Mateo does not pay 
an annual fee for its use of the easement area because it 
is PUC's policy not to charge other municipalities to have 
their utility lines located in a City-owned easement area 
when the utility provides a public benefit, such as a sewer 
line. Mr. Dowd advises that the PUC may have charged 
San Mateo County a one-time processing fee in 1971 for 
this permit, however, according to Mr. Dowd, there is no 
documentation from 1971 to support such a transaction 
between the PUC and San Mateo County. 

According to Mr. Harry Quinn of the Real Estate Division, 
the PUC is requesting authorization to sell the non- 
exclusive sewer line easement rights to San Mateo County 
instead of continuing an agreement providing San Mateo 
County with a revocable permit because the PUC recently 
declared this parcel of land to be surplus to the City's 
needs. Further, San Mateo County wishes to obtain 
permanent easement rights for their sewer line instead of 
having a revocable permit since the applicable sewer line 
pertains to a public health and safety issue (see 
Attachment). 

The proposed resolution would: (1) authorize the sale of 
non-exclusive sewer line easement rights to the County of 
San Mateo at a sale price of $5,000, or approximately 
$17.24 per square foot, and (2) authorize the Director of 
the Property to execute an easement deed and any 
necessary additional documentation required to bring 
about the sale of such rights. The rights attached to this 
ownership include the right to construct, reconstruct, 
install, inspect, maintain, replace, remove, add to, and 
repair an underground sewer line. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 
2 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Comments: 1. On February 27, 2001, the PUC approved a resolution 

(Resolution No. 01-0048) authorizing the sale of this non- 
exclusive sewer line easement to the County of San 
Mateo. On April 4, 2001, the County of San Mateo 
approved a resolution (Resolution No. 64346) authorizing 
the purchase of this non-exclusive sewer line easement. 

2. According to Ms. Medlar, the $5,000 sale price for the 
non-exclusive sewer line easement represents the fair 
market value. 

3. Ms. Medlar advises that because the County of San 
Mateo is purchasing a non-exclusive sewer line easement, 
the City could grant easement rights to other entities, 
companies or individuals. The City could grant easement 
rights to other utilities to have power lines cross over the 
parcel, or to individuals to have a footpath cross over the 
parcel. Ms. Medlar reports that any new easement rights 
could not interfere with the County of San Mateo's right 
to maintain a sewer line as outlined in the easement deed 
between the City and the County of San Mateo. Ms. 
Medlar further reports that the City continues to own the 
697 square feet of land which includes the 290 square feet 
of easement area. 

4. According to Mr. Charles Sullivan of the City 
Attorney's Office, under the terms of the proposed deed, 
the County of San Mateo will be responsible for all 
maintenance, repair, and insurance costs for the County 
of San Mateo's uses of the 290 square foot easement area. 
Mr. Sullivan further explains that under the terms of the 
proposed deed, the County of San Mateo would indemnify 
the City and County of San Francisco from all claims and 
liabilities arising from the County's use of the 290 square 
foot easement area. 

5. According to Mr. Quinn, the City is selling the non- 
exclusive sewer line easement rights in the 290 square 
foot easement area to San Mateo County instead of selling 
the entire 697 square foot landlocked parcel because, as 
Mr. Quinn states in his attached April 9, 2001 
memorandum, "None of the adjacent property owners, or 
the County of San Mateo, was interested in the purchase 
of this landlocked parcel. However, upon the failure of a 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



nearby property owner's septic system, the County of San 
Mateo Environmental Health Department ordered this 
property to join the County sewer system. The only 
feasible way to facilitate this involved inst allin g pipe from 
that property, through adjacent lands, to the County 
sewer line in the City owned parcel." 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment 



.City and County of San Francisco 




Real Estate Division 
Administrative Services Department 



MEMORANDUM 

April 9, 2001 




TO: Harvey M Rose- .- . - 

Budget Analyst, Board of Supervisors 



FROM: Harry J. Quinn 

Assistant Direct) 



SUBJECT: Sale ofNon-Excluaive Easement Rights 
To the County of San Mateo 



VIA FACSIMILE AND BY MAIL 

The City and County of San Francisco owns an approximate 697 square foot plot of land known as 
Parcel Reference Number 2895 Bay Division Pipelines 1 and 2, in an unincorporated area of San 
Mateo County near Redwood City. It is under the jurisdiction of the SFPUC. In 1971, CHy granted 
the County of San Mateo a revocable permit to install and maintain a six inch sewer line to cross 
through this parcel. CHy was paid a one-time processing fee, as was commonly done at the time. 

The SFPUC recently declared this parcel of land to be surplus. None of the adjacent property 
owners, or the County of San Mateo, was interested in the purchase of this landlocked parcel. 
However, upon the failure of a nearby property owner's septic system, the County of San Mateo 
Environmental Health Department ordered this property to join the County sewer system The only 
feasible way to facilitate this, involved installing pipe from that property, through adjacent lands, to 
the County sewer line in the City owned parcel. 

It was brought to San Mateo County's attention that their right to use the parcel was related to a 
revocable permit. The County wanted permanent easement rights for their sewer line since it is a 
public health and safety issue and City agreed to sell non-exclusive easement rights for $5,000. 
Since the County's current permit can be revoked at anytime, it would cause a great hardship and 
expense both to the County of San Mateo and adjacent property owners. This sale will not impact 
City's ability to sell additional easements over the parcel or the parcel, itself 



cc Anna Weinstein, Associate Budget Analyst 



415) 554-9050 
: AX: (415) 552-9216 



Office of the Director of Propert^MunAKvsANMATcc^jBudAmiBnuia 
25 Van Ness Avenue, Suite 400 San Francisco, 94102 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Item 2 - File 01-0764 



Departments: 



Item: 



Location: 

Purpose 
of Lease: 



Lessor: 



Department of Administrative Services, Real Estate 

Division (RED) 
Department of Human Services 

Resolution authorizing a new lease of 37,000 square feet of 
real property at 3120 Mission Street for the Department of 
Human Services (DHS). DHS is anticipating subleasing 
approximately 5,100 of the 37,000 square feet to 13 other 
governmental and nonprofit agencies working with DHS for 
the purposes of the Federal Workforce Investment Act of 
1998 (see Comment No. 3). 

Entire ground floor of 3120 Mission Street 



Under the proposed lease, the City would lease 37,000 
square feet of space to house the Department of Human 
Service's "Career Link One Stop Center." The Federal 
Workforce Investment Act of 1998 required that by March 
31, 2001, the City was to have a full service one-stop center 
to provide employment and training resources for DHS 
clients as well as related social services including 
CalWorks, MediCal, and Food Stamps. Mr. Tony Lugo of 
DHS advises that the "Career Link One Stop Center," 
which provides workforce development and related self- 
sufficiency and support services, meets the Federal 
requirements. He advises that the "Career Link One Stop 
Center" has been operating in the subject property since 
1998. However, the State Employment Development 
Department (EDD) has been the main tenant in the subject 
property. During that time, the Center provided only 
limited services. Under the proposed lease, DHS would 
become the main tenant and the proposed Center would 
provide a wider variety of workforce development and 
related self- sufficiency and support services in one location 
and thus become a full service center. Mr. Lugo advises 
that this Center would be a change in the way DHS 
delivers some of its services (i.e. in one location) but would 
not result in a change in services. 

Richard Hyde and Richard Koch of K.L.W., LLC 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Lessee: 



City and County of San Francisco, acting by and through 
the Department of Administrative Services, Division of 
Real Estate. 



No. of Sq. Ft. and 
Cost Per Month: 



Annual Cost: 

Annual 

Rent Increases: 



Annual Cost Over 
Current Rent Paid: 



37,000 square feet at a monthly rental rate of $77,700 
($2.10 per square foot per month) in Year One of the 
proposed lease. See Table 1 for anticipated subsequent year 



increases. 



$932,400 in Year One of the proposed lease 



The proposed lease stipulates annual adjustments, based 
on the Consumer Price Index for All Urban Consumers for 
the San Francisco-Oakland-San Jose area, of not less than 
3 percent and not greater than 6 percent. The increase in 
Year Two would range from a minimum of $0.06 per square 
foot per month (assuming a 3 percent increase) to an 
increase of $0.13 per square foot per month (assuming a 6 
percent increase). See Table 1 for data on anticipated 
increases in subsequent years. 



$932,400 

Currently 15 DHS employees work in the subject property. 
The State EDD allowed the City employees to occupy the 
space free of charge since 1998 (see Comment No. 4) while 
EDD was the main tenant. 



Utilities, 
Janitorial, and 
Security Services: 



Parking: 



Janitorial services would be included in the rent. The City 
would be the responsible for utilities, which Ms. Claudine 
Venegas of the RED estimates would cost $1,548 per 
month. Mr. Lugo estimates that building security services 
to be provided to the City would cost $2,833 per month. 

The proposed lease includes 10 parking spaces, which are 
included in the lease rental payments. The parking spaces 
are for 10 DHS employees to park nine City-owned vehicles 
and one parking space for DHS employees who use their 
privately-owned vehicles for City business. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

7 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Term of Lease: 



Source of Rental 
Funds: 



Comments: 



Seven years beginning June 1, 2001 and ending May 30, 
2008. The term of the 13 proposed subleases would be at 
least one year (see Comment No. 5) 



Right of Renewal: None 



40 percent from the General Fund, 32 percent from State 
Funds, and 28 percent from Federal Funds. Mr. Lugo 
advises that the lease payment for June 2001 would be 
funded from the DHS current FY 2000-2001 budget. Future 
year payments would be requested in future DHS budgets. 

In addition, DHS anticipates subleasing approximately 
5,100 square feet of the 37,000 total square feet at $2.25 
per square foot per month and thus recovering 
approximately $11,475 per month, or $137,700 in Year One 
of the proposed lease. Under this funding arrangement, the 
General Fund cost for the first year of operation would be 
$317,880 (total annual rent of $932,400 less recovery of 
$137,700 in sublease payments times 40 percent). Ms. 
Venegas of RED advises that the proposed sublease rate of 
$2.25 per square foot per month would increase in 
subsequent years in accordance with increases in the City's 
base rent. Mr. Lugo further advises that DHS intends to 
charge the subleasees a higher rate ($2.25 per square foot) 
than DHS pays to the lessor ($2.10 per square foot) in order 
for DHS to recover a proportionate share of the cost of 
utilities and building security services being paid by DHS. 

1. The proposed lease stipulates that annual rent increases 
would be based on the Consumer Price Index for All Urban 
Consumers for the San Francisco-Oakland-San Jose area 
and would be no less than 3 percent and no more than 6 
percent. Table 1 below shows the approximate rent the City 
would pay during the seven-year lease term assuming: (1) 
the minimum 3 percent annual increases that the proposed 
lease requires and (2) the maximum 6 percent increases 
that the proposed lease would allow. As noted above, DHS 
anticipates subleasing a portion of the space to 13 other 
organizations and thus would recover part of the rent paid. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 









Table 1 










Assuming 6 Percent Increases 


Assuming 3 Percent Increases 








Approximate 






Approximate 






Monthly 


Rent Per 




Monthly 


Rent Per 


Lease 


Annual 


Base 


Square Foot / 


Annual 


Base 


Square Foot / 


Year 


Base Rent 1 


Rent 1 


Month 1 


Base Rent 2 


Rent 2 


Month 2 


1 


$932,400 


$77,700 


$2.10 


$932,400 


$77,700 


$2.10 


2 


988.344 1 


82.362 1 


2.23 1 


960.372 2 


80.031 2 


2.16 2 


3 


1.047.648 1 


87.304 1 


2.36 1 


989.184 2 


82,432 2 


2.23 2 


4 


1,110,504 1 


92.542 1 


2.50 1 


1,018,860 2 


84.905 2 


2.29 2 


5 


1.177.140 1 


98.095 1 


2.65 1 


1.049.424 2 


87,4522 


2.36 2 


6 


l,247,772 l 


103.981 1 


2.81 1 


1,080,912 2 


90.076 2 


2.43 2 


7 


1.322.640 1 


110.220 1 


2.98 1 


1.113.336 2 


92,7782 


2.51 2 


Total 


$7,826,448! 






$7,144,488 2 






Average 


$l,118,064 l 


$93,172 1 


$2.52! 


$1,020,641 2 


$85,0532 


2.30 2 




1 Estimates that ; 


issume the maximum allowable 6 pe 


rcent 



annual increase. 

2 Estimates that assume the required minimum annual increase 

of 3 percent stipulated in the proposed lease. 

2. Attachment II, provided by Mr. Lugo, shows the proposed 
allocation of the 37,000 square feet at 3120 Mission Street. 
Table 2 shows a summary of the proposed allocation of the 
37,000 square feet. The Budget Analyst notes that, under 
the proposed lease, approximately 22,500 of the 37,000 
square feet, or approximately 61 percent of the subject 
property, would be used as common areas. Mr. Lugo 
advises, in Attachment III, that the significant amount of 
common space would be used for a variety of purposes 
related to the services offered at the "Career Link One Stop 
Center," such as providing clients with access to computer 
terminals, interviewing clients, and conducting workshops. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Table 2 



Description of 
Proposed Use 


# of Employees 


Approximate # 
of Square Feet 


Square Feet 
Per Employee 


Common Areas (includes lobby, 
conference rooms, hallway, 
lunch room, supply room, 
maintenance, bathroom, utility 
room, and dock area) 


N/A 


22,500 


N/A 


DHS Employees Work Space 


92 


9,200 


100 


Work Space for Program 
Partners (sublease) 


33 


3,300* 


100 


Work Space for Community- 
Based Organizations (sublease) 


18 


1,800* 


100 


Expansion Space 


N/A 


200 


N/A 


TOTAL 


143 


37,000 





* Total of 5,100 square feet. 

3. Mr. Lugo explains that the Federal Workforce 
Investment Act of 1998 requires that San Francisco have at 
least one full service one-stop center, such as the expanded 
"Career Link One Stop Center." EDD initiated the center at 
its current site in 1998 because developing such a center 
was a State as well as a Federal goal. The proposed 
expanded center will provide, in a single location, 
employment and training resources for DHS clients as well 
as related social services including CalWorks, MediCal, and 
Food Stamps. Mr. Lugo explains that the "Career Link One 
Stop Center" has been operating in the subject property 
since 1998 but will now provide a broader array of services 
in one location. He notes that the Federal law required the 
City to have such a full service one-stop center operational 
by March 31, 2001 and, according to Mr. Lugo, the proposed 
lease will allow the City to come into full compliance with 
the Federal requirement. He further notes that through the 
expanded center, DHS will be providing services it already 
provides in other locations. Therefore, he explains, the 
expansion of the center is not an expansion of the services 
DHS provides. Rather, it is a change in the way such 
services are delivered (in one location rather than in 
separate locations). 



Mr. Lugo further explains that San Francisco's "Career 
Link One Stop Center" will consist of 92 DHS employees as 
well as 51 employees of the 13 other governmental 
programs and nonprofit community agencies for a total of 
BOARD OF SUPERVISORS 
BUDGET ANALYST 
10 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



143 employees as shown in Attachment II. Mr. Lugo 
advises that EDD, City College of San Francisco, National 
Council on Aging, Private Industry Council and Youth 
Opportunity Grant, Department of Rehabiliation, and 
Treasure Island Job Corps Center (listed in Attachment II) 
have had employees working in the subject property during 
the last several years, while the State EDD was the main 
tenant. 

4. Mr. Lugo explains that employees of the State EDD 
currently occupy the subject property. EDD employees will 
be moving out May 31, 2001, except as noted below. Mr. 
Lugo informs that 15 DHS (CalWorks) employees already 
based in the subject property would remain there. The 15 
DHS employees are already located there because they 
have been working collaboratively with EDD since 1998 on 
the existing "Career Link One Stop Center." Mr. Lugo 
advises that one of EDD's goals was to open the center and 
for this reason, EDD did not require that the City pay rent 
for the City's space to reimburse EDD for the rent paid by 
EDD to the Lessor. Mr. Lugo further advises that he 
anticipates that the 14 EDD employees already at 3120 
Mission Street would remain through one of the proposed 
subleases, occupying 1,400 square feet of space. 

In addition, Mr. Lugo advises that 24 DHS Food Stamp 
Program employees would move to the subject property 
from leased space at 1235 Mission Street and another 24 
DHS MediCal Program employees would move from leased 
space at 1440 Harrison Street. Ms. Venegas advises that 
the City is in the process of purchasing 1235 Mission 
Street but that currently the San Francisco Unified School 
District leases the building to DHS. 22 additional DHS 
Family and Children's Services Program employees would 
move from City-owned space at 170 Otis Street. Seven new 
DHS positions (four of which are vacant in Employment 
Services and three of which are filled by CalWorks 
employees who would move from other DHS facilities) 
would also occupy space at 3120 Mission Street, bringing 
the total number of DHS employees (including the 15 
already there) in the subject property to 92 occupying 
9,200 square feet, or approximately 100 square feet per 
employee. Mr. Lugo advises that funding for the seven new 
positions noted above is included in the FY 2000-2001 
DHS budget. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

11 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



5. Mr. Lugo advises that DHS anticipates subleasing 
approximately 5,100 square feet to the 13 agencies shown 
in Attachment II on a one-year basis for the first year. He 
•advises that in subsequent years, DHS may enter into 
subleases longer than one year. Seven of the 13 agencies 
that would sublease 3,300 square feet include other 
government and nonprofit agencies whose services the 
Workforce Investment Act of 1998 requires be provided at 
the "Career Link One Stop Center," referred to as the 
mandated partners. DHS has invited an additional six 
nonprofit agencies to sublease 1,800 square feet of space 
because such agencies provide related services. Mr. Lugo 
advises that all but one of the proposed subleasees has 
committed to subleasing space for at least one year. 

As shown in Attachment II, DHS anticipates collecting 
$11,475 per month, or $137,700 in Year One, from its 
subleasees, assuming each agency subleases the number of 
square feet shown in Attachment II. Ms. Venegas advises 
that the proposed rate to be charged to its subleasees would 
increase annually in accordance with the annual CPI 
increases in the City's rent if such subleases are renewed. 
The proposed resolution does not indicate that such annual 
increases in the sublease rate will occur. Therefore, the 
proposed resolution should be amended accordingly. 

Ms. Venegas advises that the Real Estate Division could 
enter into the 13 proposed year-to-year subleases, on behalf 
of the Department of Human Services, and that such 
subleases are not subject to approval by the Board of 
Supervisors. Ms. Amy Brown of the City Attorney's Office 
advises that Section 23.31 of the Administrative Code 
allows the Director of Property of the Real Estate Division 
to enter into year-to-year or shorter term subleases without 
Board of Supervisors approval when the rent is less than 
$5,000 per month for each such sublease. The rent for such 
subleases would range from $225 to $3,150 per month (see 
Attachment II). Mr. Lugo advises that although some of the 
agencies have committed to subleasing space for more than 
one year, DHS anticipates entering into only one-year 
subleases for the first year. Such short-term subleases will 
allow DHS to monitor the performance of the subleasees. 
Such one-year subleases will also allow DHS to ensure that 
the center is operating as planned. Mr. Lugo advises that in 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



subsequent years, DHS may enter into longer-term 
subleases. 

At the time the proposed resolution was submitted to the 
Board of Supervisors, DHS had anticipated subleasing 
approximately 7,650 square feet and such wording was 
included in the proposed resolution. As shown in 
Attachment II, DHS now anticipates subleasing 
approximately 5,100 square feet but is still not certain 
exactly how much space would be subleased. Therefore, the 
proposed resolution should be amended accordingly. 

6. As noted above, Mr. Lugo informs that a total of 70 DHS 
employees are moving to the subject property from 1235 
Mission Street (24 Food Stamp employees), 1440 Harrison 
Street (24 Medi-Cal employees), and 170 Otis Street (22 
Family and Children's Services employees). Mr. Lugo 
reports that employees are being moved from these three 
locations due to overcrowding. Mr. Lugo advises that these 
three buildings are old and are not designed to be modern 
office buildings. He explains that the configuration of the 
buildings is complex and that it is difficult to measure and 
distinguish common space from office space. Therefore, he 
advises that the Department has estimated the per 
employee space based on each workstation and as a result, 
the three buildings shown in Table 3 all reflect 64 square 
feet per employee (in contrast to the 100 square feet at the 
subject property). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Table 3 





Approximate 


Total 


Approximate # 




Approximate # 




Total 


Number of 


of Square Feet 




of Square Feet 




Square Feet of 


Employees 


of Office Space 




of Office Space 




Office Space 


(Before 


Per Employee 


# of Employees 


Per Employee 




(excludes 


Proposed 


(Before 


(After 


(After Proposed 


Location 


common areas) 


Move) 


Proposed Move) 


Proposed Move) 


Move) 


(1) 1235 


34,240 


535 


64 


511 


67 


Mission 












Street 












(2) 1440 


12,032 


188 


64 


164 


73 


Harrison 












Street 












(3) 170 


43,072 


673 


64 


651 


66 


Otis Street 













Recommendations: 



7. Attachment I, provided by Ms. Venegas, advises that the 
proposed lease represents fair market value for the subject 
property. Ms. Venegas advises that the RED supports the 
negotiated terms of the proposed lease but believes that 
approval should be a policy decision for the Board of 
Supervisors, due to the fact that DHS anticipates 
subleasing part of the space. The Budget Analyst also 
recommends that the proposed resolution is a policy matter 
for the Board of Supervisors because the subject property 
would be subleased and such subleases would not require 
subsequent Board of Supervisors approval. 

1. Amend the proposed resolution as follows: 

(a) on page 1, line 14, delete "of no less than 7,650 s.f." 
so that the phrase reads, "shall sublease a portion 
of the premises to other public agencies...," in 
accordance with Comment No. 5 

(b) on page 1, line 17, delete "to offset costs and the 
common use of space" and in its place, insert "that 
shall increase annually in accordance with CPI 
adjustments to the City's base rent," in accordance 
with Comment No. 5 which would provide annual 
rent adjustments to the DHS sublesees. 



2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors since (a) the 
subleases do not require Board of Supervisors approval, as 
stated in Comment No. 7, and (b) DHS is requesting to 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

14 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



lease an additional 37,000 square feet of space, including 
31,900 square feet due to reported overcrowded conditions, 
in three other DHS existing facilities, including two other 
leased facilities at no reduction in rental costs, and one 
City-owned facility. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 





•City and County of San Francisco Real Estate Division 

Administrative Services Department 



ATTACHMENT I 

Page 1 of 1 
MEMORANDUM 



Date: May 3, 2001 

To: Reaata Falk, Budget Analyst 
Via Facsimile #252-046" 1 

From: Claudine O. Venegas, Senior Real Property Offi 

Re: 3120 Mission Street 



Per your E-mail message, please update the file with .the information you received from 
the Department of Human Services (DHS) regarding the space allocation. 

As you know from speaking whh Tony Lugo, DHS has a unique program plan to 
sublease a portion of this proposed lease space to some of their work partners and 
community based organizations to meet their legal requirements. Therefore, the Board of 
Supervisors should evaluate the suitability of this course of action. 

We believe that the business terms for the lease of the premises are fair market value. 
The available listings that we have seen in the area range from S2/sq. ft - S2.50/sq. ft. 

Call me at #554-9872 if you have any further questions in this regard. 



Attachments 

cc: Rose Chow, DHS 
Tony Lugo, DHS 



(41 5) S5*-9a6Q OWc* of the Director of Property 

FAX: (41 5) 552-921 6 25 Van Nese Avenue, Suite 400 San Francisco, 941 02 




and County of San Francisco Department of Human Services 



Tr«nt Rhorer 
ATTACHMENT II E»c«tfv« Director 

Pare 1 of 2 , toputyurtacrz 

B Janlea And«r*on Santos (Acting} 

Jim Bulcfc 
Sally Kipper 



MEMORANDUM 



Date: May 8, 2001 

To: Budget Analyst's Office 

From: Tony Lugo, Department of Human Services £^ ' C NLx 

Re: Proposed Allocation of Space and Tenants in 3 120 Mission Street 

Per your request, the table on the following page shows the Department of Human 
Services' anticipated allocation of space for the property at 3 120 Mission Street Except 
for EDD, we have received commitment letters from the outside organizations shown in 
the table regarding their intention to sublease space in 3120 Mission Street I strongly 
believe that EDD will also decide to sublease space in order to maintain a presence at the 
site. 

V/e plan to charge the sublease tenants $2.25 per square foot in the first year of the 
proposed lease. This rate will increase accordingly as the City's rent for the space 
increases in future years so as to result in no additional cost to the City. 

If you have additional questions or if I can be of further help, please contact me at 
577-6309. 



(415) 557-5000 P.O. Box 7388 San Franclaeo, California S4120 



17 



lily and County of San Francisco Department of Human Services 




AT-TACHMENT II 
Page 2 of 2 



Trent Rhorer 
Executive Director 

Deputy Directors 

Janice Anderson Santos (Acting) 

Jim Buick 

Sally Kipper 



Proposed Allocation of Space at 3120 Mission Street 



Organization 


#of 
' Square Feet 


#of 
Employees 


#of 

Square Feet 

Per Emplovee 


Sublease 
Monthly Rent 


DHS 


9,200 


92 


100 


N/A 


Common Areas 


22,500 


N/A 


N/A 


N/A 


Expansion Space 


200 


N/A 


N/A 


N/A 


Subtotal 


31,900 








^MANDATED FAKENERS^S^i 


--■:--.-- -.- ■■- ■ :. 


.-" . . -j.i; : 3 %. 


-..- -.-_.'-:■.-.>• '-r.-j.-_ 


-_-:-L-~--.:-.-^--?Ai--,is_-:~f. 


EDD 


1,400 


14 


100 


S3, 150 


City College of San Francisco 


800 


8 


100 


1,800 


National Council 
on Aging 


400 


4 


100 


900 


Private Industry Council and 
Youth Opportunity Grant 


400 


4 


100 


900 


Department of Rehabilitation 


100 


1 


100 


225 


Treasure Island Job Corps Center 


100 


1 


100 


225 


San Francisco Housing Authority 


100 


1 


100 


225 


Subtotal 


3,300 








COMMUNITY BASED 
ORGANIZATION 










Arriba Juntas 


300 


3 


100 


675 


LIFEPRINT (formerly Alumnae 
Resources) 


400 


4 


100 


900 


Northern California Service 
League 


200 


2 


100 


450 


Refugee Transitions 


200 


2 


100 


450 


UCSF/Child Trauma Research 
Project 


400 


4 


100 


900 


African AIDS Network 


300 


3 


100 


675 


Subtotal 


1,800 








TOTAL 


37,000 


143 100 


$11,475 



(4 i) 557-5000 



P.O. Box 7988 

18 



San Francisco, California 94120 



City and County of San Francisco Department of Human Services 




'ATTACHMENT Til 
Page 1 of 1 



MEMORANDUM 



Trent Rhorer 
Executive Director 

Deputy Directors 

Janice Anderson Santos (Acting) 

Jim Buick 

Sally Kipper 






Date: May 9, 2001 

To: San Francisco Board of Supervisors 

From: Tony Lugo, Department of Human Services 

Re: Justification for Common Space at 3120 Mission Street 

The following is a description of the distribution and the proposed use for the 22,500 square feet of common 
space at 3120 Mission Street. In general these common areas include lobby, conference rooms, hallways, 
lunch room, supply room, maintenance room, utility room, dock area, classrooms, computer labs, and childcare 
room. More specifically: 



Space description 

4 conference rooms 
3 classrooms 
1 computer lab 
1 childcare room 



10 interviewing stations 
14 client computer stations 
7 round tables (8 people each) 
Client resource area (labor market) 



Space use 

The concept of the One Stop Center is to provide a multitude of services collocated in one site. At the 
Career Link One Stop Center, a great part of the common space will be utilized by clients to access 
information with and without staff assistance. These services include a variety of workshops, training sessions, 
seminars, and group interviews going on concurrently. The center is also open to community members to walk 
in and utilize computer stations and a large resource area for job seeking activities. These activities may 
include Internet search, reading occupational material, attending workshops, and using the tables for 
preparation of resumes. This area also serves as a waiting area for clients connected to either the MediCal, 
Food Stamps, CalWorks, Family and Children, Employment Services or any of the agencies collocated in the 
center (childcare services are provided while clients are in the building). 

Traffic flow 

Our records show that since September 1, 1998 (when Career Link opened) until April 30, 2001, a 
total of 19,505 clients have used the resources at the lobby averaging 71.5 minutes each client. Last month 719 
clients used the center as a site for job search activities. That only accounts for about half of the building. 

Our proposed plan includes adding two (2) additional units of Food Stamps, MediCal, and Family and 
Children with the increase presence of our Employment Services and CalWorks plus an additional number of 
Community Based Organizations. Solely the DHS services will add more than 10,000 ongoing cases (families) 
who are likely to be coming into the center in a regular basis for any of above described services. 

I feel that with all the services and activities being provided at this center the space described above is barely 
sufficient. If you have additional questions or if I can be of further help, please contact me at 557-6309. 



(415)557-5000 



P.O. Box 7988 



19 



San Francisco, California 9412C 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Item 3 - File 01-0730 
Department: 

Item: 

Amount: 
Source of Funds: 

Description: 



Department of Parking and Traffic (DPT) 
Parking Enforcement Program 

Hearing to consider the release of reserved funds for the DPT 
in the amount of $173,741 to fund overtime expenditures for 
Parking Enforcement services. 

$173,741 

General Fund monies appropriated and reserved by the 
Board of Supervisors in the FY 2000-2001 DPT budget. 

The DPT FY 2000-2001 budget included total overtime 
expenditures of $483,416, of which $173,741 ($161,139 in 
salaries plus $12,602 in fringe benefits) was reserved, leaving 
$309,675 available for expenditure. During the June 2000 
budget hearings, the Finance and Labor Committee reserved, 
in general, one-third of overtime expenditures for 
departments having significant overtime budgets. 

The table below provides a summary of overtime spending to 
date and the Controller's projected spending for FY 2000- 
2001, as well as spending to date and projections for DPTs 
Parking Enforcement Salary and Fringe Benefit account 
based on the Controller's payroll records for the pay period 
ending April 13, 2001. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

20 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Controller's Projection - DPT Parking Enforcement Program General Fund 

Expenditures for Overtime and total Salaries and Fringe Benefits based on 

Expenditures through April 13, 2001 







Total 




Actual 


Projected 




Expenditures 


FY 2000-2001 




Through Pay 


Expenditures Projected Surplus 


FY 2000-2001 


Period Ending 


Through June 30, (Deficit) 


Budget 


4/13/01* 


2001 ** 



Overtime 
Salaries and Fringe 

Benefits Including 

Overtime 



$483,416 
19,519,962 



$ 440,348 
15,334,679 



$513,091 
19,429,682 



($29,675) 
90,280 



Year to date costs less Other Adjustments including reimbursed expenditures for Parking 
Enforcement services. 

Projection based on spending at the level of the pay period ending 4/13/01 for the 
remainder of the Fiscal Year (5.5 pay periods remaining). 

As summarized in the table above, the Controller's latest 
projection report for salary and fringe benefit expenditures 
(including overtime) for the DPTs Parking Enforcement 
Program shows that: 

• As of the pay period ending April 13, 2001 (20.5 of 26.0 
pay periods of FY 2000-2001), DPT has incurred 
approximately $440,348 in net overtime costs. Therefore, 
DPT has expended approximately 91.1 percent of its 
Parking Enforcement overtime appropriation of $483,416 
and approximately 142.2 percent of its available, 
unreserved Parking Enforcement overtime funding of 
$309,675 on overtime expenditures that cannot be 
recovered. 

• Based on the Parking Enforcement overtime expenditures 
incurred during the pay period ending April 13, 2001, the 
Controller's projection indicates that DPT will expend 
$513,091 on overtime, which is $29,675 more than 
Parking Enforcement's total FY 2000-2001 overtime 
appropriation of $483,416. 

• For total Parking Enforcement Salaries and Fringe 
Benefit Expenditures, including Overtime, the 
Controller's projections, based on the actual expenditures 
for the pay period ending April 13, 2001, indicate that 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

21 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

DPT will incur total expenditures of $19,429,682 in FY 
2000-2001, which is $90,280 or 0.46 percent less than the 
FY 2000-2001 budget amount of $19,519,962. 

Comments: 1. Ms. Julia Dawson of DPT advises that net overtime 

expenditures are gross overtime expenditures less the 
amount recovered from other City Departments as well as 
from special events and private companies for Parking 
Enforcement services provided by DPT. According to Ms. 
Dawson, through March 24, 2001, DPT has billed for 
$384,755.13 in overtime expenditures for Parking 
Enforcement Services incurred on behalf of other City 
Departments, special events and private companies. 
Attachment I, provided by DPT, is a list of such overtime 
billings of $384,755.13 through March 24, 2001. Ms. Dawson 
advises that as of April 19, 2001, DPT had been paid 
approximately $289,509.62 of the $384,755.13 or 
approximately 75 percent of the amount billed. Ms. Dawson 
advises that DPT bills for its Parking Enforcement Services 
based on actual costs. Therefore, DPTs billings are based on 
a full recovery of its Parking Enforcement overtime expenses. 

2. Ms. Dawson anticipates that there will be a total of 16 
events held in April, May and June that will result in 
additional billable overtime Parking Enforcement 
expenditures in the amount of $99,319. Attachment II, 
provided by DPT, shows the 16 events from April through 
June in which DPT has or will provide Parking Enforcement 
services on an overtime basis. According to Ms. Dawson, the 
actual Parking Enforcement costs identified to date for April 
and May total $40,509. Therefore, the total billable Parking 
Enforcement overtime expenditures for FY 2000-2001 are 
projected to total $484,074.13 ($384,755.13 in Parking 
Enforcement overtime expenditures through March 24, 2001 
plus $99,319 for April, May and June). 

3. The Budget Analyst has independently projected year-end 
net overtime expenditures for DPTs Parking Enforcement 
Program of $439,952.87 (gross overtime expenditures of 
$924,027 for FY 2000-2001 less the estimated cost recoveries 
of $484,074.13), which is $43,463.13 less than the budgeted 
overtime expenditures of $483,416, including the subject 
requested release of reserved overtime funds of $173,741. 



BOARD OF SUPERVISORS 
BUDGETANALYST 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Ms. Dawson states that the Budget Analyst's year-end net 
overtime projection $439,952.87 is reasonable based on 
expenditures thus far and anticipated Parking Enforcement 
expenditures for the remainder of FY 2000-2001 but she 
advises that costs for special events through the end of the 
fiscal year could be higher than expected. Furthermore, Ms. 
Dawson notes that paid overtime for rolling black-outs on 
March 19, 2001 and March 20, 2001 totaled $10,231 due to 
the need to assign staff for traffic controls at intersections 
where traffic signals are not functioning and that a similar 
need for additional overtime may still occur in FY 2000-2001. 
Therefore, the Budget Analyst agrees that the funds in the 
amount of $43,463.13 (which would be surplus based on the 
Budget Analyst's projected need for overtime expenditures) 
represents a reasonable contingency in the event that actual 
overtime costs for the balance of the fiscal year exceed 
anticipated costs. 

Recommendation: Based on the projection of the Budget Analyst, a reduction of 
$43,463.13 could be made by the Finance Committee from 
the requested funds of $173,741. However, because of 
unforeseen needs which could still occur in FY 2000-2001, 
the Budget Analyst recommends that the Finance Committee 
approve the proposed release of reserved funds for Parking 
Enforcement overtime in the amount of $173,741 as 
requested. Any surplus funds remaining unexpended at the 
end of Fiscal Year 2000-2001 will be closed out to the General 
Fund year-end surplus. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

23 



Attachment I 
i>age lot 2 



EPARTMENT OF PARKING AND TRAFFIC 

llings for PCO Services 

r" 2000-2001 

llings as of 3/24/01, Payments as of 4/19/01 











DATE 


AMOUNT 


DATE 


•ENT 


DATE 


CONTACT 


AMT BILLED 


BILLED 


RECEIVED 


RECEIVED 


llmore St. Fair 


7/1-7/2 


Steve Restivo 


1,311.04 


7/12/00 


1,311.04 


8/30/00 


;mi Con 


7/10-7/12 


George Granizo 


848.32 


7/27/00 


848.32 


8/10/00 


arped Tour 


7/1/00 


Mary Conde 


1,553.12 


7/27/00 


1,553.12 


8/30/00 


Dccer Match 


7/1/00 


Chris Mack 


4,742.96 


8/1/00 


4,742.96 


3/14/01 


etallica Concert 


7/14/00 


Chris Mack 


15,207.94 


8/1/00 


15,207.94 


3/14/01 


ern Grove Concert 


7/16/00 


Sandy Lee 


636.24 


7/27/00 


636.24 


12/21/00 


ern Grove Concert 


7/23/00 


Sandy Lee 


694.08 


7/27/00 


694.08 


12/21/00 


oscone Center 


7/10-12/00 


Mike Roach 


9,717.12 


7/27/00 


9,717.12 


9/2/00 


- Marathon 


7/16/00 


Peter Nantell 


13,588.90 


7/27/00 


13,588.90 


10/23/00 


oscone Center 


8/5-8/31/00 


Mike Roach 


13,881.60 


9/26/00 


13,881.60 


10/3/00 


affic Sign Shop 


8/11,8/25,9/19 




2,120.80 


9/26/00 


2,120.80 


10/3/00 


Games-Civic 


7/29/00 


Shanie Chambers 


385.60 


9/26/00 


385.60 


10/23/00 


■oundbreaking 


7/24/00 


Judi Froehlich 


462.72 


9/26/00 


462.72 


1/29/01 


em Grove Concert 


7/30/00 


Sandy Lee 


578.40 


9/26/00 


578.40 


12/21/00 


ern Grove Concert 


8/13/00 


Sandy Lee 


578.40 


9/26/00 


578.40 


12/21/00 


h&Mis Garage 


8/5-8/31/00 


George Granizo 


2,005.12 


9/26/00 


2,005.12 


10/19/00 


aCarte.Park 


9/2-9/4/00 


Maggie Pesta 


1,850.88 


9/26/00 


1,850.88 


10/13/00 


I of SF 


8/22700 


Denise Turner 


4,579.02 


9/26/00 


4,579.02 


11/22/00 


va las Americas 


9/17/00 


Kristin Carmichael 


751.92 


10/3/00 


751.92 


10/19/00 


ilet Parking 


9/14/00 


Jamie Dyos 


616.96 


10/3/00 


616.96 


10/13/00 


lase Corporate Chal. 


8/9/00 


Tim Wason 


616.96 


10/3/00 


616.96 




is/O'Farrell Garage 


6/27-7/1/00 


Steven Lee 


3,084.80 


10/3/00 


3,084.80 


10/30/00 


is/O'Farrell Garage 


7/2-8/6/00 


Steven Lee 


10,796.80 


10/3/00 


10,796.80 


10/30/00 


ce Now & Zen 


9/24/00 


Cybele Pettus 


269.92 


10/10/00 


269.92 


10/13/00 


tino Summer Fiesta 


9/17/00 


Patricia Aguayo 


1,272.48 


10/20/00 






acle 


10/1/00 


Alison Cheim 


7,607.08 


10/26/00 


7,607.08 


12/7/00 


i & Mission 


10/2-10/5/00 


George Granizo 


1,233.92 


10/26/00 


1,233.92 


11/13/00 


oscone Center 


10/3-10/5/00 


Mike Roach 


5,552.64 


10/30/00 


5,552.64 


11/7/00 


rtofSF 


10/7/00 


Denise Turner 


3,453.28 


10/30/00 


3,453.28 


11/22/00 


: Anthony's 


10/8/00 


Michael Durand 


385.60 


10/30/00 


385.60 


12/19/00 


Ijction Day 


10/10/00 


Patricia Fado 


250.64 


10/30/00 






'!SF Concert 


10/8/00 


Joe Cooper 


1,233.92 


10/31/00 


1 ,233.92 


11/29/00 


!ppa & Graham 


9/30/00 


Ferris Suer 


154.24 


10/31/00 


154.24 


11/8/00 


itholic Mass 


10/28/00 


Jack Bair 


12,348.90 


11/2/00 


12,348.90 


2/9/01 


jng. Beth Shalom 


10/21/00 




154.24 


12/5/00 


1 54.24 


1/18/01 


: g City Diner 


11/2/00 


Brian Harms 


462.72 


12/5/00 


462.72 


12/22/00 


"pt. of Elections 


11/4/00 


Patricia Fado 


504.50 


12/5/00 






: ;e Concert 


11/4/00 


Ian Brennan 


501.28 


12/5/00 


501.28 


12/20/00 


Ipt. of Elections 


11/7/00 


Patricia Fado 


23,287.92 


12/5/00 






5 & Mission 


11/10,11/24-25 




1,195.36 


12/5/00 


1,195.36 


12/28/00 


Oscone Center 


11/24-12/1 


Mike Roach 


13,534.56 


12/5/00 


13,534.56 


12/22/00 


3 & Mission 


1/9-1/12/01 


George Granizo 


1,185.90 


1/23/01 


1,185.90 




Biner's Game 


1/13/01 


Larry Baer- Giants 


10,734.26 


1/23/01 


10,734.26 




*ers Enforcement 


season 


Mo Fowell 


8,626.96 


1/23/01 


8,626.96 




-ot. of Elections 


12/12/00 


Adam Farb 


23,667.07 


1/23/01 






V scone Center 


12/02-1/12 


Mike Roach 


20,176.32 


1/26/01 


20,176.32 




v scone Center 


1/21-2/13/01 


Mike Roach 


14,151.76 


2/20/01 


14,151.76 





24 



Source: Department of Parking and Traffic 



Attachment I 
Page 2ot 2 



Billings for PCO Services 

FY 2000-2001 

Billings as of 3/24/01, Payments as of 4/19/01 











DATE 


AMOUNT 


DATE 


EVENT 


DATE 


CONTACT 


AMT BILLED 


BILLED 


RECEIVED 


RECEIVED 


Bay to Breakers 


5/20/00 


Peter Nantell 


19,896.39 


2/21/01 






SF Ballet 


1/24/01 


Sam Leftwich 


316.24 


2/21/01 


316.24 


2/26/01 


Chinese NY Run 


2/4/01 


Robert Darling 


1,770.04 


2/21/01 


1,770.04 




PacBell Meeting 


2/7-278/01 


Angela Yee 


3,024.05 


2/21/01 


3,024.05 


4/19/01 


5th & Mission 


1/21-2707/01 


George Granizo 


1,403.32 


2/21/01 


1,403.32 


2/28/01 


Tet Festival 


1/21/01 


Thuc Khuong 


751.07 


2/21/01 


751.07 




XFL 


2/5/01 


Larry Baer-Giants 


11,483.85 


2/21/01 


11,483.85 


3/6/01 


Moscone Center 


2/19-21/01 


Mike Roach 


5,455.14 


2/26/01 


5,455.14 


3/6/01 


XFL 


2/25/01 


Joanna Blume 


11,365.51 


2/26/01 


11,365.51 


3/14/01 


Moscone Center 


2/26-3/2/01 


Mike Roach 


12,353.15 


3/6/01 


12,353.15 


4/4/01 


XFL 


3/3/01 


Joanna Blume 


11,319.95 


3/6/01 


11,319.95 


3/14/01 


XFL 


3/11/01 


Joanna Blume 


11,316.09 


3/12/01 


11,316.09 


3/20/01 


Moscone Center 


3/12-3/14 


Mike Roach 


7,411.89 


3/19/01 


7,411.89 


4/4/01 


First Street Project 


1/8-3/9 


Paul Petri 


25,180.61 


3/19/01 






O'Reilly's St. Pats 


3/16-3/17 


Myles O'Reilly 


2,727.58 


3/28/01 


2,727.58 


4/19/01 


Royal Exchange 


3/16/01 


Mike O'Brien 


1,185.90 


3/28/01 






Soiree Valet Pkg 


3/20-3/23 


Jamie Dyos 


2,569.45 


3/28/01 


2,569.45 


4/4/01 


Buena Vista 


3/17/18 


Chris LaMontagne 


1,185.90 


3/29/01 


1,185.90 


4/19/01 


XFL 


3/24/01 


Joanna Blume 


11,483.83 


3/28/01 


11,483.83 


4/19/01 


Total Billed 






384,755.13 








Total Received 






289,509.62 








Total Outstanding 






95,245.51 









25 



Source: Department of Parking and Traffic 



Department of Parking and Traffic 
Cost Recovery Events 
FY 2000/01, 4th Quarter 



Attachment II 



Date 



Event 





Actuals 


Estimated Cost 


$ 


1,977 




$ 


316 




$ 


8,301 




s 


9,741 




$ 


277 




$ 


19,896 






$ 


12,853 




$ 


22,000 




s 


870 




$ 


3,083 




$ 


7,500 




$ 


2,846 




$ 


1,423 




$ 


6,733 




$ 


632 




$ 


870 


$ 


40,509 $ 


58,810 $ 



Total 



April-01 Moscone - Women's Summit 

April-01 5th/Mission Garage 

April-01 First Street Traffic Control 

April-01 Traffic Signal Shop 

May-01 Maiden Lane Construction 

May-01 Bay to Breakers 

May-01 KFOGKaboom 

May-01 Pac Bell Park - D. Matthews (2 days) 

May-01 Moscone/Oncology Conv 

May-01 Crissy Field Opening 

June-01 Black and White Ball 

June-01 Fiesta Filipina 

June-01 North Beach Festival 

June-01 3COM Park - Soccer 

June-01 5th/Mission Garage 

June-01 Moscone Java 



Total Estimated Billings 



99,319 



The Bay to Breakers costs were paid in advance. 



Source: Department of Parking and Traffic 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 

Items 4 and 5 - Files 01-0738 and 01-0760 



Department: 



Department of Public Health (DPH) 
Department of Real Estate (DRE) 



Item: 



File 01-0738 

Resolution authorizing and approving a new Master 
Lease by and between the City and County of San 
Francisco, for the Department of Public Health, as lessee, 
and Sonali Holdings LLC, as lessor, for the Star Hotel 
located at 2176-2180 Mission Street, San Francisco. 



Location: 



File 01-0760 

Request for release of $490,667 State grant funding to 
DPH, previously reserved by the Board of Supervisors for 
start-up costs in the FY 2000-2001 DPH budget. 

Star Hotel, 2176-2180 Mission Street, San Francisco. 



Purpose of Lease: 



Lessor: 



Lessee: 

No. of Sq. Ft. 
and Rental 
Cost Per Month: 



Annual Rental 
Payment: 



To provide 50 residential single -room occupancy units 
under DPH's Direct Access to Housing Program (see 
"Description" below). 

Sonali Holdings, LLC, a California limited liability 
company. 

City and County of San Francisco, on behalf of DPH. 



Approximately 10,770 square feet, including, 7,000 square 
feet to be used for residential space and 3,770 square feet 
to be used for office space by the property manager and 
the support service provider at a monthly rent of $23,780 
(approximately $2.21 per square foot per month) during 
Year One of the subject lease. 



$285,360 On each anniversary of the lease 
commencement date, the rental rate would increase by 
the percentage increase in the Consumer Price Index 
(CPI) for the San Francisco Metropolitan Area, provided 
that the percentage increase shall not be less than 3 
percent nor more than 6 percent. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 



Total Annual Cost: 



$912,020 in the first year of the subject lease, including 
property management, support services and rent. 





Expenditure Item 


Estimated Cost 




Property Management 






(See Comment No. 2) 


$326,660 




Support services 






(See Comment No. 3) 


300,000 




Rent 


285,360 




Total 


$912,020 


Utilities and Janitor 






Provided by Lessor: 


None 





Term of Lease: 
Right of Renewal: 
Source of Funds: 



Ten years (effective from the lease commencement date 
estimated at June 1, 2001). 

The City shall have the right to renew for two additional 
10-year terms. 

On November 29, 2000, the Finance Committee 
authorized DPH to accept and expend a State grant of 
AB2034 funds from the State Department of Mental 
Health for a total of $3,961,167 to provide integrated 
services for mentally ill and dual/multiple diagnosed 
adults (File 00-2010). The amount of $490,667 was placed 
on reserve to obtain budget details for start-up costs to 
operate the Star Hotel. 

According to Mr. Mark Trotz, of the Department of Public 
Health, DPHs FY 2001-2002 budget contains the above 
listed annual costs of $912,020 to be funded from the 
sources in the following table: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 
28 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 



Description: 



Sources of Funds Summary 


FY 2001-2002 


Sources 




Amount 


General Fund 




$146,660 


AB2034 




554,023 


CAKE 1 




31,337 


Rental Income 




180.000 


Totrd Revenues 




$912,020 



The Comprehensive Aids Resources Emergency Act 
(CARE) is a federal funding program. The Act provides 
funds to increase the availability of primary health care 
and support services, including housing, in order to 
reduce utilization of more costly inpatient care, increase 
access to care for under-served populations, and improve 
the quality of life of those affected by the AIDS epidemic. 

The Rental Income of $180,000 for FY 2001-2002 is 
estimated based on monthly payments of $300 per unit for 
50 units, totaling $15,000 per month and $180,000 
annually. 

The subject master lease would permit DPH to lease 
10,770 square feet of the Star Hotel, a residential class 
tourist hotel located at 2176-2180 Mission Street, San 
Francisco, for ten years in order to sublease single-room 
residential units to individuals eligible for assistance from 
DPH's Direct Access to Housing Program. This program 
is designed to secure affordable, community-based 
housing for homeless and extremely low-income San 
Francisco residents. The City or the nonprofit 
organization then subleases residential units in those 
buildings to low-income individuals who fall into one or 
more of the following categories: 

(a) Are medically frail. 

(b) Are homeless or at risk of homelessness. 

(c) Have recently exited homeless shelters or 
residential treatment programs. 

(d) Are capable of living independently with on-site 
support services. 



1 In FY 00-01, the City and County of San Francisco received $34 million from the Federal 
Health Resources and Services Administration (HRSA). The CARE Council (the policy 
making and oversight committee of CARE in San Francisco) allocated $6.8 million of these 
funds to housing services. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

29 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 

According to Mr. Trotz, the Star Hotel would be the fourth 
residential hotel to be leased by the City for the Direct 
Access to Housing Program. The first was the Pacific Bay 
Inn, (75 units), located at 520 Jones Street; the second 
was the Windsor Hotel, (94 units), located at 238 Eddy 
Street; and the third was the Hotel Le Nain (96 units), 
located at 730 Eddy Street. 

Comments: 1. The Star Hotel is currently undergoing a complete 

renovation as a result of damage sustained from a fire. 
Once renovations are complete, a total of 50 single-room 
units of housing will be provided. According to Mr. Trotz, 
DPH will lease the entire building, with the exception of 
some commercial space on the ground floor currently 
being used as a restaurant. The following table is a 
summary of the start-up costs for the Star Hotel in FY 
2000-2001 to be paid for with the subject requested 
reserved funds of $490,667 (File 01-0760). All start-up 
costs shown below, with the exception of the $230,000 
budgeted for Tenant Improvements, are for contractual 
project management services to be provided by the 
selected contractor, John Stewart Company. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

30 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 



Start-up Costs in FY 2000-2001 



Expenditure Item 


Estimated Cost 


Star Hotel Tenant Improvements 


$230,000 


Personnel Cost for 1 month 2 


40,753 


Management fee 1.5 months 3 


3,038 


Security deposit (2 months rent) 


47,560 


Legal consultant 


5,000 


Client recruitment/telephone 


2,400 


Database Consultant 


10,000 


Furniture 4 


96,000 


Equipment 


42,200 


Operating and maintenance reserve 


13,716 


Total 


$490,667 



Attachment I provided by DPH contains additional 
budget details of the payments listed above. As noted in 
Attachment I, Mr. Trotz states that, no contractor costs 
will be incurred for this project before the Board of 
Supervisors has approved the lease and the release of 
funds. 

Residents would occupy the second and third floors of the 
building. The Irma Restaurant is located on the first floor. 
According to Ms. Leyva, the renovations being 
undertaken by the building owner, total an estimated cost 
of $960,000, DPH proposes to make up to $230,000 in 
additional tenant improvements to the Star Hotel. 
According to Mr. Trotz, these improvements include: 

• The creation of community rooms on each of the 
residential floors (an estimated $38,800). 

• The construction of on-site offices for the social 
service providers (an estimated $89,725). 

• Improvements to the building's HVAC (an 
estimated $83,225). 



3 These personnel costs reflect the one-month cost of personnel for FY 2000-2001 once the 
building is operational. 

3 The half-month difference between management costs and personnel costs is to reflect 
offsite management costs currently being incurred by the John Stewart Company prior to the 
opening of the Star Hotel. According to Mr. Trotz, the contractor will not be paid unless this 
lease is approved and the reserve funds released. 

4 This amount includes furniture for the community rooms, offices and lobby areas, as well as 
individual room furnishings. Each unit will come furnished with a bed, armoire, chair and 
side table. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 



• Improvements to the electrical systems (an 
estimated $18,250). 

These improvements will cost up to $230,000 and will be 
completed by the lessor as part of current building 
renovations expected to be completed by June 20, 2001 at 
a total estimated cost of $230,000. The lessor will be 
reimbursed by DPH for up to $230,000. 

2. According to Ms. Leyva, DPH issued a Request for 
Qualifications (RFQ) in October of 2000 for property 
management and support services for the Star Hotel. 
According to Mr. Trotz, only the John Stewart Company 
responded to the RFQ to provide property management 
services and only Baker Places Inc 5 . a non-profit 
organization, responded to the RFQ to provide support 
services at the Star Hotel. The RFQ was sent to over 300 
individuals representing over 100 organizations according 
to Mr. Trotz. 

According to Mr. Trotz, $326,660 in estimated annual 
property management services would be paid to the John 
Stewart Company for the expenditures shown in the 
following table: 
Property Management Services 



Expenditure Item 


Estimated Cost 


7.53 FTEs 6 


$221,410 


Management Fee (7.44%) 7 


24,300 


Utilities 


57,000 


Telephone 


5,000 


Office Supplies 


3,000 


Seminars and Training 


1,200 


Maintenance, services, and repairs 


8,000 


Processing fees/credit reports for 




new tenants/advertising 


2,000 


Mileage/Travel 


1,750 


Tenant activities 


3.000 


Total 


$326,660 



5 Baker Place Inc.'s application included the Tenderloin AIDS Resource Center and the 
Lutheran Social Services as subcontractors. 

6 The 7.5 FTEs consisting of 1 FTE site administrator, 4.2 FTE Front Desk Clerks, .33 FTE 
Maintenance supervisor, 1 FTE Assistant Maintenance position and 1 FTE Janitor will be 
responsible for on-site operations functions. 

7 The management fee is calculated as $40.50 multiplied by 50 (the number of units) per 
month, totaling $24,300 annually. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
32 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 



Attachment I provided by DPH also contains explanations 
for property management services expenditures. 

Attachment II provided by DPH, compares the property 
management and support services costs for the three 
existing residential hotels to the proposed cost of the Star 
Hotel. Attachment II also explains variations in unit cost 
of such services which depend on the needs of the target 
population and the proximity of other support services. 

3. According to Mr. Trotz, Baker Places Inc. would 
provide a range of on-site support services for mental 
health, life skills development, crisis intervention, access 
to medical care, and meals, at an annual cost of $300,000. 
The $300,000 in expenditures including 5 FTEs are shown 
in the following table: 



BOARD OF SUPERVISORS 
BUDGET^ ANALYST 



Memo to Finance 

May 16, 2001 Finance Committee Meeting 



Support Services Cost Summary 




Expenditure Item 


Estimated Cost 


Program Director (1 FTE) 


$50,000 


Intensive Case Managers (2 FTEs) 


100,000 


Case Manager for 




AIDS Services (0.5 FTE) 


25,000 


Peers Advocate 




Social Worker (1 FTE) 


50,000 


Money Manager (0.5 FTE) 


25,000 


Client activities and supplies 


50.000 


Total 


$300,000 



Under the subject lease, DPH would be responsible for the 
cost of maintenance and repair of major systems such as 
the elevator, and the heating, ventilation, air 
conditioning, electrical, and plumbing systems. The John 
Stewart Company would be responsible for the full cost of 
routine maintenance and repair of non-major systems and 
facilities, including monthly pest control services at an 
estimated cost of $8,000 annually. If such maintenance or 
repairs exceeds $1,500 per maintenance incidence, DPH 
shall notify the lessor of the necessity for an extra 
ordinary maintenance or repair obligation. If during any 
one year of the lease period, the City's annual 
maintenance and repair costs exceeds $10,000 and did not 
result from DPH or subtenant negligence, misconduct, or 
vandalism, DPH may submit to lessor a written request 
that the lessor pay the amount in excess of the $10,000 
annual cap. 8 



Recommendation: 



4. Ms. Jean Medlar of the Department of Real Estate 
Services states that the proposed rent at $2.21 per square 
foot represents fair market value. 

Approve the proposed resolution and the release of 
reserved funds. 



8 According to Mr. Trotz failure of the lessor to make necessary repairs in excess of the 
annual cap of $10,000 would be considered a breach of contract and DPH would deduct that 
amount from its rent payment or pursue a legal remedy. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

34 



Attachment I 

Ps.se 1 of 2 
City and County of San Francisco Housing and Urban Health 

Department of Public Health 101 Grove Street, Room 119 

San Francisco, California 94102-4505 

Phone: (415) 554-2679 

Fax: (415)554-2658 



MEMORANDUM 



DATE: 5/10/01 

TO: Pascal St. Gerard 

FROM: Marc Trotz 

SUBJECT: Tenant Improvements and Start-up Costs; FY 2001-2002 Items 



Tenant Improvements 

The $230,000 for tenant improvements was determined through a negotiated process with the 
owner of the Star. The basis for our negotiation was that the City would only pay for 
improvements above and beyond the customary work that would be done to bring a hotel up to 
good habitability standards. Therefore, items such as the community kitchen, private counseling 
spaces, and community rooms, were tenant improvements agreed upon as specifically 
attributable to our supportive housing model. The cost for these improvements were included in 
the overall construction cost breakdown by the owner's contractor. Staff at DPH consulted with 
independent architects and construction specialists to verify that the cost were reasonable. The 
improvements are expected to be completed by June 20, 2001. 

At this point in time, we have not paid, or have not committed to pay for the cost of the tenant 
improvements. The owner is fully aware that the lease and release of funds is pending before 
the Board of Supervisors and is proceeding with the rehabilitation at their own risk. 

Start-up Costs 

No contractor costs will be incurred for this project before the Board of Supervisors has approved 
the lease and the release of funds. Any unspent funds from the start-up will be available for 
appropriation by the Board of Supervisors at a future date. 

The entire budget for fiscal year 00-01 is being considered as "start-up" given the fact that the 
building will not start housing residents unit fiscal year 01-02. DPH has learned that having a 
well thought out start-up is key to operating a successful supportive housing project that can 
provide effective stabilization services for people who have been chronically homeless and/or 
who have multiple disabilities. The start-up includes equipping the building with the necessary 
furnishings and office equipment, having the proper physical spaces that promote community 
building and other therapeutic interventions, and hiring and training qualified staff to provide 
property management and support services. 



35 



Attachment I Page 2 of 2 

Below is a brief description of several start-up items you inquired about that were listed in the 
breakdown previously transmitted to you: 



Personnel 


Key staff for both property management and support services are hired 1 
month before tenant intake to conduct staff framing and work on 
solidifying all programmatic details. 


Security Deposit 


This is a damage deposit paid to the owner following execution of the 
lease and is equal to 2 months rent. 


Legal Consultant 


Project Sponsor will use these funds to ensure that all tenant leases and 
house rules conform to fair housing law and other non-discrimination 
statutes. 


Client Recruitment/ 
telephone 


These costs are associated with the outreach and rent-up process that will 
begin in June. 


Furniture and 
Equipment 


These cost include the cost of furnishings for the 50 rooms, lobby 
furniture, basic kitchen equipment, computers and a printer. 


Management Fee 


The management fee is a standard per unit per month charge that 
management companies charge for their services. Payment of the 
management fee will commence following approval by the Board of 
Supervisors. 


Database Consultant 


Because of the multiple funding sources, including state, federal, and 
local, DPH will be required to report on many different outcomes and 
processes that will occur at this project. The database insures that client 
level information is collected in a consistent manner and includes all the 
data necessary for reporting to our various funding sources and 
appropriately protects client confidentiality. 


Operating and 

Maintenance 

Reserve 


In all projects of this scale it is prudent to have some funds set aside for 
unforeseen operating and maintenance expenses. These funds are put in a 
segregated account and can only be used to cover such costs. 



FY 2001-2002 Costs 



Property 

Management 

Services 



In FY 01-02 (excluded from the start-up costs), budget will include 
processing fees, seminars and training, and mileage and travel. 
Processing fees are standard property management expenses related to 
obtaining credit reports, tenant eviction history, and criminal history of 
prospective tenants. Seminar and training will be for property 
management staff to build their skills and capacity in property 
management. Mileage and travel are travel for the purchase of supplies 
or equipment or to attend necessary meetings related to property 
management. 



I believe the other items on the start-up breakdown are self explanatory. If you have any further 
questions, please call me at 554-2565. 



36 



City and County of San Francisco 
Department of Public Health 



Attachment II 

Housing and Urban Health 

101 Grove Street, Room 119 

San Francisco, California 94102-4505 

Phone: (415) 554-2679 

Fax: (415)554-2658 



MEMORANDUM 



DATE: 


5/10/01 


TO: 


Pascal St. Gerard 


FROM: 


Marc Trotz 


SUBJECT: 


Site Comparison 



The table below includes the comparison you requested. In comparing sites it is important to 
note that support services and building operations costs vary between buildings due to 
differences in target population, level of on-site services, and physical properties of each 
building. Lease rates range between S3 15.00-S425.00 per unit per month depending on site 
location, date at which the lease was negotiated, and building amenities. The current project, the 
Star Hotel has a relatively high per unit cost mainly because it is a small building but has many 
of the fixed costs of a larger site and it is targeting seriously mentally ill people. Conversely, the 
LeNain Hotel targets homeless seniors and is a relatively stable and quiet building and relies on a 
broad range of community-based services in close proximity to the site. 



Property 


No 
of Units 


Services 
on Site 


Property 

Management 

Cost 


Support 

Services 

Cost 


Total 
Cost 


Cost 1 
per Unit 


Star 
Hotel 


50 


case management, HTV/AIDS peer 
advocacy, mental health and 
substance abuse services, 
vocational services, money 
management 


$326,660 


5300,000 


5626,660 


S12,533 z 


Windsor 
Hotel 


94 


medical care, case management, 
benefits/entitlement services, rent 
payee program 


5548,670 


5427,755 


5976,425 


510,388 


Le Nain 
Hotel 


92 


case management, senior services, 
rent payee program 


5379,152 


5240,938 


5520,090 


56.740 3 


Pacific 
Bay Inn 


75 


case management, mental health & 
substance abuse services, money 
management 


S240,430 


5364,895 


5605,325 


58,071 



1 Cost per unit will vary across the different residential hotels depending on the total number of units, the level of 

support services provided at the site and the year in which the residential hotel was brought on line. In addition, 

some of the residential hotels have tenants that are not part of DPH's program and as a result pay slighdy more in 

monthly rent, thus allowing DPH to recover more of its costs. 

: The Star Hotel's cost per unit tends to be higher than the other sites DPH has brought on line because of the acute 

needs of the target population that will reside at the Star Hotel. 

3 The Le Nain Hotel's cost per unit is the lowest because the neighborhood surrounding it has a number of support 

services in close proximity as a result it was not necessary to locate them onsite. 

37 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Item 6 - File 01-0729 

Department: Department of Public Works (DPW) 

Department of Public Health (DPH) 
Laguna Honda Hospital (LHH) 

Item: Release of reserved funds in the amount of $3,371,740 for 

architectural and engineering costs for the Laguna Honda 
Hospital Replacement Project. 

Amount: $3,371,740 

Source of Funds: Tobacco Settlement Funds 

Description: In June of 2000 the Board of Supervisors appropriated a 

total of $9,243,481, including $3,371,740 placed on 
reserve, in Tobacco Settlement Funds for the Laguna 
Honda Replacement Project (File No. 00-0772) for the 
following: 

Architectural and Engineering Consultants $6,743,481 

Initial Permits and City Agency Review Fees 1,600,000 

Environmental Review Consultants 900.000 

Total $9,243,481 

At the time of the supplemental appropriation, the 
Department of Public Works (DPW) had not yet selected 
consultants for the $6,743,481 in Architectural and 
Engineering consulting services. The Finance and Labor 
Committee of the Board of Supervisors thus placed 
$3,371,740 on reserve, or 50 percent of the $6,743,481 
appropriated for the Architectural and Engineering 
services consultant costs, pending selection of consultants 
and submission of budget details, including the hourly 
rates and estimated hours, to the Finance Committee. 
The proposed release of reserved funds in the amount of 
$3,371,740 would partially fund the expansion of an 
existing consulting contract with an outside architectural 
and engineering consulting firm for the Laguna Honda 
Hospital Replacement Project. 

According to Mr. Michael Lane of the Department of 
Public Works (DPW), in July of 2000, DPW selected the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

38 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



joint venture of Anshen & Allen/Gordon H. Chong & 
Partners, Laguna Honda Hospital Joint Venture 
Architects ("Joint Venture"), through a Request for 
Qualifications (RFQ) process to provide the architectural 
and engineering services needed for the entire project, 
including the planning, design, and construction phases of 
the project. Mr. Lane advises that the total estimated 
costs for such architectural and engineering services is 
$30,000,000. However, DPW entered into an initial 
interim contract ("interim contract") with the Joint 
Venture for $2,400,352, for the period from September 1, 
2000 through February 28, 2001, in order to define the 
larger scope and cost of the project before finalizing the 
Master Architect Agreement with the Joint Venture (see 
Comment No. 3). 

DPW now plans to expand the interim contract of 
$2,400,352 with the Joint Venture by $4,343,129 for 
continued architectural programming and planning 
services, for a total contract amount of $6,743,481, as 
originally budgeted for such services in the June of 2000 
supplemental appropriation. This additional $4,343,129 
would be funded by the proposed release of $3,371,740 in 
reserved Tobacco Settlement funds and $971,389 in 
Tobacco Settlement Funds previously appropriated by the 
Board of Supervisors in June of 2000. 

Mr. Lane advises that in July of 2001, DPW plans to 
finalize a Master Architect Agreement with the Joint 
Venture at a total estimated cost of approximately 
$30,000,000, which would include the scope, terms and 
maximum cost of all architectural and engineering 
services to be provided by the Joint Venture. Mr. Lane 
advises that this estimated $30,000,000 Master Architect 
Agreement would include the $6,743,481 original 
appropriation ($2,400,352 interim contract plus the 
proposed $4,343,129 expansion). Mr. Lane advises that 
the additional $23,256,519 ($30,000,000 less $6,743,481) 
in funding required for the estimated $30,000,000 Master 
Architect Agreement would be funded by a combination of 
Tobacco Settlement Funds and General Obligation Bond 
proceeds. Mr. Lane advises that DPW will request Board 
of Supervisors approval of the Master Architect 
Agreement of approximately $30,000,000, as required by 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

39 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Charter Section 9.118, because the contract will exceed 
$10 Tnillion. 

The Joint Venture is comprised of 38 firms, including the 
two prime contractors (Anshen & Allen and Gordon H. 
Chong & Partners) and 36 subcontractors. Attachment I, 
provided by DPW, excluding the Administrative 
Assistants, contains the range of $75 to $290 in hourly 
rates for the 38 firms. 

Budget: Attachment II, provided by DPW, contains a budget, 

including the hourly rates and hours, for the original 
supplemental appropriation of $6,743,481 for 
architectural and engineering consultant costs which was 
appropriated in June of 2000, including the proposed 
release of reserved funds of $3,371,740. 

Comments: 1. Under the Laguna Honda Hospital Replacement 

Project, the majority of the Laguna Honda Hospital main 
bunding will be demolished and reconstructed, including 
Clarendon Hall, resulting in a facility that will 
accommodate a total of 1,200 beds. Mr. Lane advises that 
construction on the Laguna Honda Hospital Replacement 
Project is expected to begin in Summer of 2002, be largely 
functional in 2007 and be fully completed by the year 
2011. Mr. Lane further advises that the design and 
planning portion of the project is expected to be completed 
by Spring of 2003. 

2. According to Mr. Lane, the estimated total project costs 
for the Laguna Honda Hospital Replacement Project is 
$401,600,000. The anticipated sources of funding for the 
$401,600,000 project would be as follows: 

General Obligation Bonds approved by the voters 

in the November of 1999 General Election $299,000,000 

Interest Earned on General Obligation Bonds 21,703,283 

Tobacco Settlement Revenues 

(including interest earnings) 80,696.717 

$401,600,000 

Total construction contract costs for the proposed project 
are estimated at $309,221,000. Mr. Lane advises that, as 
previously noted, the anticipated total expenditures for 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Architectural and Engineering consulting for the Laguna 
Honda Hospital Replacement Project are $30,000,000, or 
9.7 percent, of the total construction costs of $309,221,000 
for the Laguna Honda Hospital Replacement Project. The 
balance of $62,379,000 in project costs ($401,600,000 less 
$309,221,000 less $30,000,000) includes the 
Environmental Impact Report, permits, fees, construction 
management, inspections and additional design by DPWs 
Bureau of Architecture. 

3. As previously noted, DPW entered into an interim 
contract of $2,400,352 with the Joint Venture for planning 
and programming work for the six-month period from 
September 1, 2000 through February 28, 2001, which was 
funded by the $3,371,741 in funds appropriated and not 
reserved by the Board of Supervisors in June of 2000. Mr. 
Lane advises that as soon as the requested release of 
reserved funds is approved, DPW will modify the interim 
contract to extend the contract expiration date to August 
15, 2001. Mr. Lane states that by the Finance Committee 
meeting of May 16, 2001, when the subject release of 
reserved funds will be considered, DPW will not have 
incurred expenses above the $3,371,741 previously 
appropriated and not reserved by the Board of 
Supervisors in June of 2000. 

4. As stated previously, DPW selected the Joint Venture 
through a Request for Proposals (RFQ) process based on 
the Joint Venture's qualifications. Mr. Lane advises that 
DPW advertised the RFQ in the newspaper, and that only 
the three following firms submitted responses: (a) Anshen 
& Allen/Gordon H. Chong & Partners, Laguna Honda 
Hospital Joint Venture Architects, which was selected, (b) 
Skidmore, Owens, Merrill (SOM)/Smith Group, and (c) 
Kaplan, McLaughlin, Diaz (KMD)/Gerson Overstreet. 
Attachment IV, provided by DPW, explains the criteria 
DPW used to evaluate proposals and select Anshen & 
Allen/Gordon H. Chong & Partners, Laguna Honda 
Hospital Joint Venture Architects. Mr. Lane states that 
firms were not required to include cost estimates in their 
proposals, and as stated in Attachment IV, "cost was not 
one of the evaluation criterion." 

Recommendation: Approve the proposed release of reserved funds. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

41 



FY .00-01 Reserve Funds - LHH Tobacco Settlement Funds 



FY 00-01 Reserve Funds -LHH Tobacco Settlement Funds 
ATTACHMENT A 



Design Consulting Services 

The architectural and engineering services are needed to continue conducting the environmental 
review process, to complete programming and planning phase, to secure preliminary permits, to 
complete site and utility analyses and to complete permit documents for temporary utility plants. 



Average Median 
Rate 



Hours 



Total 



Design Consulting 



S119/hour 



28,334 



53,371,740 



The consultant fees among the 38 firms range from a median of S77 an hour for an entry 
engineer to a median of S290 an hour for a president/principal. The firm of Lamorena & Chang, 
Certified Public Accountants, did a cost disclosure review on the rates of the joint venture firms 
for reasonableness. See Table below. The average median rate of SI 19 per hour is a blended 
rate that is comparable to the median rate of a senior associate project manager. 



Consultants' Billing Rate Summary 

Title Median 

President, Principal $290 

Principal, Director, VP 164 

Lower level Sr. Principal 1 50 

Managing Principal, Sr. 135 

Project Manager, Sr. Assoc. 119 

Engineer III 108 

Engineer II 92 

Engineer I 77 

CADD Jr. 75 

Admin Assistant 60 

Information Services, I.T. 130 



Source: Department of Public Works 



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45 




Attachment lv 

City & County of San Francisco 
Laguna Honda Hospital Replacement Program 

Willie Lewis Brown, Jr., Mayor 

Mitchell H. Katz, MD, Director of Public Health 

Edwin M. Lee Director of Public Works 



May 10, 2001 

Mr. Harvey Rose 

Budget Analyst Office 

Board of Supervisors 

1 390 Market Street, Suite 1 025 

San Francisco, CA 94102 

Subject RFQ for Architectural Services 

Dear Mr. Rose: 

The Architect for the Laguna Honda Repfacement Hospital was selected through a competitive 
qualifications-based process. This is consistent with selecting professional services contractors. An 
RFQ was advertised in the paper en January 4, 2000 (CNS1758264). Invitations to participate were not 
sent out to Individual firms. The Architect was required to have completed or have under construction, at 
a minimum, one S100M hospital, three $50M meolcal buildings, one master plan for a medical campus 
and one $20M City project Similar qualifications applied to the major subconsultants. Three proposals 
were received on May 8, 2000. 

The selection process included a technicar screening, and a scored interview. Only teams who passed 
the technical screening would be invited for interviews. All three firms passed the technical screening. 
The selection was based on evaluation criteria which were included and explained in the RFQ. The 
evaluation criteria included the proposers' understanding of the project, their vision for the new hospital, 
additional experience beyond the minimum required, the organization of their team, availability to 
perform, quality control, cost control and project management procedures and experience dealing with 
the State regulatory agency for hospital construction. Cost was not one of the evaluation criterion. 

An independent panel of seven people with health care background was selected to conduct the 
interviews and score the teams. Representatives of the Department of Public Works, the City Attorney's 
office and the Human Rights Commission, attended but did not participate in the interviews. Interviews 
were held on Jury 13, 2000. 

The panelists scored each team independently and the scores were added up and the ranking of the 
teams released. In accordance with the Sunshine Ordinance, the panelists' names and their individual 
scores were also released. 

After the protest period had past, negotiations began with the highest ranked firm; Anshen+AIlen/Gordon 
Chong & Partners. 

If you have any questions, please feel free to call me at 759-4595. 
Sincerely, 




Michael Lane 
Program Manager 



375 Laguna Honda Boulevard, San Francisco, CA 94116 
(415)759-4553 Pax (41 5) 759-1584 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Item 7 - File 01-0761 

Department: 

Item: 



Amount: 
Source of Funds: 

Description: 



Department of Public Health (DPH) 

Hearing to consider the release of reserved funds in the 
amount of $20,000 to continue the funding of an existing 
Health Educator position in the Mangini Settlement budget 
for the period March of 2002 through June of 2002. 

$20,000 

$1,500,000 in proceeds from a Settlement and Consolidation 
Agreement with the R.J. Reynolds Tobacco Company 
regarding Mansini v. R.J. Reynolds Tobacco Company, et .al. 

In 1997 San Francisco, along with 13 other California cities 
and counties, reached a settlement agreement with R.J. 
Reynolds Tobacco Company in Mansini v. R.J. Reynolds 
Tobacco Company, et .al. Under the settlement agreement, 
San Francisco received $1,500,000 to finance education, 
enforcement, and advertising campaigns to discourage 
smoking by minors. In September of 1998 the Board of 
Supervisors appropriated $1,500,000 to fund media, health 
education, and enforcement programs and placed $553,405 
on reserve (File 98-140). In December of 1998 the Finance 
and Labor Committee released $73,636 of the $553,405 to 
fund enforcement services provided by the Department of 
Agriculture, Weights and Measures through a work order to 
DPH, and continued to reserve $479,769 (File 98-2003). 

In August of 2000 the Board of Supervisors released an 
additional $211,190 to fund a media campaign designed to 
discourage minors from cigarette smoking, leaving $268,579 
on reserve (File 00-1305). On December 20, 2000, the 
Finance Committee approved the release of $248,579 of the 
$268,579 to fund community -based intervention programs to 
discourage smoking, leaving the subject $20,000 on reserve 
(File 00-1583). 

According to Ms. Monique Zmuda of DPH, DPH is requesting 
that the subject $20,000 in reserved Mangini Settlement 
funds be released to fund 6.5 pay periods, or 13 weeks, for an 
existing Health Educator position from March 30, 2002 
through June 30, 2002. According to Ms. Zmuda, DPH is 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

47 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Budget: 



requesting the release of the subject reserved funds at this 
time to ensure that this position is fully funded throughout 
the upcoming Fiscal Year 2001-2002. According to Ms. 
Zmuda, this Health Educator position was filled on April 2, 
2001. Ms. Zmuda advises that Mangini Settlement funds 
previously appropriated by the Board of Supervisors in 
September of 1998 are being used to pay the annual salary 
cost of $64,428 for this Health Educator position for the 12 
month period from April 2, 2001 through March 29, 2002. 
The $20,000 in reserved Mangini Settlement funds have been 
requested to provide sufficient funding for this position for 
the remainder of Fiscal Year 2001-2002, from March 30, 2002 
through June 30, 2002. 

Ms. Zmuda reports that the proposed budget for the period 
from March 30, 2002 through June 30, 2002 for this $20,000 
request for salary costs is as follows: 













Mandatory 














Fringe 














Benefits (@ 








Bi Weekly 




Total 


appoximately 


Total 


Position 


FTE 


Salary 


Pay Periods 


Salary 


24.2 percent) 


Expenditure 


2822 


1.00 


$2,478 


6.5 


$16,107 


$3,893 


$20,000 



Comment: 



According to Ms. Zmuda, this Health Educator position has 
been working since April 2, 2001 and would continue to work 
under the Tobacco Free Project Director to develop, 
implement, and evaluate the Mangini Settlement funded 
tobacco prevention programs (see Attachment for job 
description). Ms. Zmuda reports that previously appropriated 
Mangini Settlement funds are being used to pay this 
position's salary costs from April 2, 2001 through March 29, 
2002. The subject $20,000 in reserved Mangini Settlement 
funds would pay this position's salary costs from March 30, 
2002 through June 30, 2002. Ms. Zmuda advises that 
beginning on July 1, 2002, subject to approval of the Board of 
Supervisors, funds from the Master Tobacco Settlement 
Revenue Fund would be used to pay the salary costs of this 
position. The Master Tobacco Settlement Revenue Fund 
includes tobacco settlement monies of $1 million annually, 
from Fiscal Year 2000-2001 through Fiscal Year 2024-2025. 
This Fund is used to fund expenditures related to DPH's 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

48 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Tobacco Free Project whose purpose is to discourage minors 
from smoking. 

Recommendation: Approve the requested release of reserved funds of $20,000. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

49 



Attachment 



(Attachment) 

REQUEST FOR RELEASE OF 

520,000 MANGINI SETTLEMENT FUNDS FROM RESERVE 



Position 


FTE 


Bi Weekly 
Salary 


Pay Periods 


Total Salary 


MFB 


Total 
Expenditure 



2822 



1.00 



$2,478 



6.5 



$16,107 



$3,893 $20,000 



CLASS 2822 HEALTH EDUCATOR 
JOB DESCRD7TION 

Under the supervision of the Tobacco Free Project Director, the employee will perform the 
following functions: 

1. Develop, implement and evaluate the Mangini Settlement funded tobacco prevention 
program. 

2. Maintain current research findings on successful tobacco prevention interventions, 
including tobacco control policy issues. 

3. Monitor contractors implementing the community capacity building process, which 
involves advocacy for environmental and policy change for tobacco control. 

4. Provide technical assistance and training to community based contractors on the 
development and implementation of community diagnoses, advocacy strategies to 
address identified community health needs and concerns, as well as overall planning and 
organizational development. 

5. Monitor progress of other city departments provided funding for enforcement of laws 
regulating tobacco sales to minors, youth access and tobacco advertising. 

6. Plan, develop and provide health education presentations. 

7. Work with evaluation contractor on evaluation of the program. 

8. Develop media and public relations strategies with media contractor to publicize program 
activities and gain public support for tobacco control actions. 

9. Write progress reports and other documents in response to requests from administration 
as needed. 

10. Participate in development of comprehensive tobacco control plan and budget for Master 
Settlement funded tobacco control program of the Tobacco Free Project. 

11. Collect, compile and analyze a variety of data submitted by contractors and other city 
departments. 

12. Serve as representative to department committees and work groups. 

13. Serve as representative to regional tobacco control work groups and committees. 



\\NTCA2\exec_wS\BOS\MaiiginirVatt_doc 



50 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Item 9 -File 01-0549 



Department: 
Item: 

Amount: 
Source of funds: 



Description: 



Fire Department 

Supplemental Appropriation for the Overtime costs of uniform 
Firefighters and Investigators in the Fire Department. 

$2,991,267 

General Fund Reserve $1,626,267 

Increased Fire Inspection Services Revenue 505,000 

Increased Fire Plan Checking Revenue 360,000 

Increased Paramedic Services Revenue 500,000 

Total Sources $2,991,267 

The proposed supplemental appropriation is comprised of the 
following Overtime: 



Fire Suppression Overtime 
Fire Prevention Overtime 
Total 



$2,486,267 

505.000 

$2,991,267 



According to a March 15, 2001 letter submitted by Acting Chief 
of the Fire Department Paul Tabacco, the combined effect of 
a) Firefighter retirements, which generally occur early each 
fiscal year, and b) absenteeism resulting from Firefighter use 
of vacation time, compensatory time, sick leave and disability 
leave, reduces daily staffing to levels that are not sufficient to 
meet the minimum daily requirement of 352 Firefighters for 
Fire Suppression, including Emergency Medical Services 
personnel. Hence, the Department frequently meets its 
minimum daily staffing policy of 352 Firefighters by 
backfilling vacant positions and absences with Firefighters on 
overtime status, who are paid at time and one half rates. 

Based on data submitted to the Budget Analyst, the Fire 
Department employed, on average, 34.6 Firefighters on 
overtime per day for the six month period of July of 2000 
through December of 2000. During that time, the Department 
was also hiring and training new Firefighters. Chief Tabacco 
reports the following new hires since July of 2000: 

• 36 H2 Firefighters were hired and trained and were 
assigned to Fire suppression duty in August of 2000; 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

51 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



• 48 H2 Firefighters were hired and trained and were 
assigned to Fire suppression duty in November of 2000; 

• 47 H3 Firefighter Paramedics were assigned to Emergency 
Medical Services duty in January of 2001; and, 

• 23 H2 Firefighters graduated from training recently, on 
March 16, 2001 and have been assigned to Fire suppression 
duty. 

As a result of hiring and training a total of 154 new 
Firefighters and Firefighter Paramedics this Fiscal Year as 
outlined above, the number of Firefighters on Overtime to 
meet the department's Minimum Daily Staffing policy of 352 
Firefighters for Fire Suppression, including Emergency 
Medical Services, has decreased from the average of 34.6 per 
day for the first six months of FY 2000-2001 to approximately 
6 per day for the period of January through April of 2001. 

In addition to the Overtime needs for Fire suppression, 
discussed above, Chief Tabacco reports that continued high 
demand for Fire Inspection services by developers and 
contractors has resulted in increased Fire Prevention Overtime 
spending for such services as the Fire Department is often 
asked to expedite construction inspection services and conduct 
certain inspection services such as alarm testing before or 
after normal work hours and on weekends. 

Because of the need for high rates of spending for Overtime 
discussed above, the Fire Department has requested additional 
Overtime funding for a) Fire Suppression Services in the 
amount of $2,486,267 and b) Fire Prevention Services in the 
amount of $505,000, for a total supplemental appropriation of 
$2,991,267. 

The Fire Department has also realized increased departmental 
revenue in the amount of $505,000 for Fire Inspection Services 
Revenue, $360,000 for Fire Plan Checking Revenue and 
$500,000 for Paramedic Services Revenue, for total additional 
revenues of $1,365,000, to fund this supplemental 
appropriation request, together with $1,626,267 from the 
General Fund Reserve resulting in a total request of 
$2,991,267. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

52 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

The proposed supplemental appropriation in the amount of 
$2,991,267 was based on a projection submitted to the Mayor 
that used actual expenditures through the pay period ending 
February 16, 2001. The projection for Fire Department 
Overtime spending and all Salaries and Fringe Benefit costs, 
including Overtime is shown below. 

Fire Department Projection of General Fund Expenditures for Overtime and 

total Salaries and Fringe Benefits based on Actual Expenditures through 

February 16, 2001 and Fire Department Spending Plan 

Actual 
Expenditures Projected 
Through Pay Expenditures Projected Surplus 
FY 2000-2001 Period Ending Through July 30, (Deficit) 
Budget 2/16/2001 2001 

Overtime $7,382,801 $9,034,823 $11,286,347 ($3,903,546) 

All Salaries and Fringe $160,720,343* $106,474,054 $163,711,610 ($2,991,267) 

Benefits Including Overtime 

* The Fire Department budget figure shown above for all salaries and benefits of $160,720,343 
was $83,214 less than the correct amount of $160,803,557. 

As shown in the table above: 

• Fire Department Overtime spending through February 16, 
2001 of $9,034,823 already exceeded the Overtime budget 
amount for the entire fiscal year of $7,382,801 by 
$1,652,022 or 22.4 percent. 

• Projected Overtime spending for all of FY 2000-2001 of 
$11,286,347 would exceed the Overtime budget amount for 
the entire fiscal year of $7,382,801 by $3,903,546 or 52.9 
percent. 

• For all General Fund Salaries and Benefits, including 
Overtime, the Fire Department spending plan projected 
total spending of $163,711,610 which is $2,991,267 or 1.9 
percent more than the budget amount for such 
expenditures of $160,803,557. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

53 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



During FY 2000-2001, the Budget Analyst has monitored 
overtime spending and Firefighter absenteeism data in 
conjunction with the performance audit and the Zero Base 
Budget Analysis of the Fire Department directed by the Board 
of Supervisors. 

Based on payroll expenditures incurred since the proposed 
supplemental appropriation was submitted to the Mayor on 
March 15, 2001, Fire Department Overtime spending has 
continued to decline. As noted above, Fire Suppression staffing 
has increased as new personnel have been assigned to sworn 
duty, and the number of Firefighters assigned on Overtime to 
meet the department's Minimum Daily Staffing policy of 352 
has consequently decreased. While Overtime spending 
averaged $609,805 per pay period during the first six months 
of FY 2000-2001, average Overtime spending fell to $133,029 
per pay period during the month of March, 2001. 

Comments: 1. The Budget Analyst has reviewed the Fire Department's 

spending plan projections which concludes that the amount 
needed for the proposed supplemental appropriation is 
$2,991,267. The Budget Analyst's review concluded that the 
Fire Department's projected Overtime spending was at a 
higher rate for the remainder of FY 2000-2001 in comparison 
to its most recent actual overtime expenditures. The Budget 
Analyst then reviewed the spending plan with the Fire 
Department, to update the spending plan to include 
expenditure data from subsequent pay periods and reduce the 
assumed levels of spending for Overtime during the remainder 
of the fiscal year to reflect recent trends. 

Based on this further analysis, the Budget Analyst 
recommends that the proposed supplemental appropriation 
can be reduced by $830,791, from the request of $2,991,267 to 
a new total of $2,160,476. The Fire Department agrees with 
the recommendation of the Budget Analyst, which would 
reduce the required funding from the General Fund Reserve 
from $1,626,267 to $795,476. 

2. During the performance of the Budget Analyst's Zero 
Base Budget Review, the Budget Analyst has learned from 
Fire Department management that more Firefighter personnel 
have been assigned to the San Francisco Airport than the 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

54 






Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

amount of funds budgeted. Up to as many as 20 Firefighters 
have been assigned to the Airport whom the Airport has not 
funded during the last two fiscal years. The Fire Department 
and the Mayor's Office are working with Airport staff to 
account for the funds owed to the General Fund by the Airport 
for the increased costs of Airport fire protection. The amount of 
funds owed by the Airport to the General Fund for FY 1999- 
2000 and FY 2000-2001 is estimated to be $1,500,000 
according to Ms. Christine Ragan, Chief Financial Officer of 
the Fire Department. As of the writing of this report however, 
this matter has not been resolved. The Budget Analyst 
therefore recommends that the proposed supplemental 
appropriation be continued by the Finance Committee pending 
resolution of this matter. Should the Airport reimburse the 
General Fund by the estimated amount of $1,500,000, such 
funds would eliminate the need to provide any monies from the 
General Fund Reserve, including the reduced amount of 
$795,476 as recommended by the Budget Analyst. In addition, 
receipt of such funds from the Airport would increase the 
General Fund FY 2000-2001 yearend surplus by approximately 
$704,524 ($1,500,000 less $795,476). 

Recommendations: 1. Reduce the proposed supplemental appropriation by 

$830,791 from $2,991,267 to $2,160,476 as follows: 

• Amend page one, line eight of the supplemental 
appropriation to reduce the amount of funding from the 
General Fund Reserve by $830,791 from $1,626,267 to 
$795,476. 

• Amend page one line 22 of the supplemental appropriation 
to reduce the expenditure amount for Suppression 
Overtime - Uniform by $830,791 from $2,486,267 to 
$1,655,476. 

2. Continue the proposed supplemental appropriation, as 
amended, to the call of the Chair pending resolution of the 
amount owed by the Airport to the General Fund as noted in 
Comment 2 above. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

55 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Item 10 - File 01-0711 

Department: 

Item: 



Amount: 
Source of Funds: 
Proposed Budget: 



Sheriffs Department 

Ordinance appropriating $2,971,186 from the General 
Fund Reserve to cover shortfalls in the Salaries, 
Overtime, Holiday Pay and Workers' Compensation 
accounts of the Sheriffs Department. 

$2,971,186 

General Fund Reserve 

The Sheriffs proposed FY 2000-2001 supplemental 
appropriation request is as follows: 



Permanent Salaries 
Fringe Benefits 
Overtime 
Holiday Pay 
Subtotal 
Workers' Compensation 
Total 



$625,997 
153,026 

1,487,463 
130.827 



$2,397,313 

573.873 

$2,971,186 



Description: 



The Controller's Office projects a Sheriffs Department 
General Fund Salary and Fringe benefit deficit, including 
Overtime and Holiday Pay, of approximately $3,112,328, 
as of April 13, 2001. The table below provides a summary 
of actual spending on Salaries and Fringe Benefits, 
including Overtime and Holiday Pay, as of April 13, 2001, 
and projected expenditures through June 30, 2001, for all 
Sheriffs Department General Fund Salary and Fringe 
Benefit accounts, including Overtime and Holiday Pay, 
based on the Controller's payroll records. 



BOARD OF SUPERVISORS 
BUDGETANALYST 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Controller's Projection - Sheriffs Department General Fund Expenditures for 

Overtime Only and Total Salaries and Fringe Benefits, including Overtime and 

Holiday Pay, through June 30, 2001. 





FY 2000- 
2001 Budget 


Expenditures 

Through Pay 

Period Ending 

4/13/2001 


Projected 
Expenditures 
Through June 

30, 2001* 


Projected 
Surplus 
(Deficit) 


Overtime 


$3,319,370 


$4,276,125 


$5,441,609 


($2,122,239) 


Salaries and Fringe 
Benefits, Including 
Overtime and Holiday Pay 


$60,796,938 


$50,417,174 


$63,909,266 


($3,112,328) 




*Projection based on average spending per pay period, as of 
4/13/2001, projected for the remainder of the Fiscal Year. 



As summarized in the table above, the Controller's latest 
projection report for Salary and Fringe Benefit 
expenditures, including Overtime and Holiday Pay, shows 
that: 






As of the pay period ending April 13, 2001, the 
Sheriffs Department has incurred General Fund 
Overtime expenditures of $4,276,158. 
Through April 13, 2001 (or 20.5 of 26.0 pay periods in 
FY 2000-2001) the Sheriffs Department has already 
expended 128.8 percent of its total Overtime 
appropriation of $3,319,370. 

Based on actual Overtime expenditures incurred 
through the pay period ending April 13, 2001, the 
Controller projects that the Sheriffs Department will 
spend a total of $5,441,609 on Overtime, which is 63.9 
percent, or $2,122,239 more than the Department's 
total FY 2000-2001 Overtime appropriation of 
$3,319,370. 

For all Salaries and Fringe Benefit Expenditures, 
including Overtime and Hobday Pay, the Controller 
projects that the Sheriffs Department will incur total 
expenditures of $63,909,266 in FY 2000-2001, which is 
$3,112,328 or 5.1 percent more than the FY 2000-2001 
budget amount of $60,796,938. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

57 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

Comments: 1. According to Ms. Jean Mariani of the Sheriffs 

Department, the Department's FY 2000-2001 budget 
included increased attrition savings of $600,000 compared 
to the FY 1999-2000 budget, and increased salary step 
adjustment savings of approximately $900,000 to offset 
increases in the Overtime budget- 

2. The Sheriffs Department projects that an additional 
$573,873 is needed for the Workers' Compensation 
account. According to Ms. Mariani, the projected 
Workers' Compensation need of $573,873 includes a one- 
time settlement of an extraordinary claim of $385,880. 

Sheriffs Department Projected Workers' Compensation Expenditures through 

June 30, 2001 

Actual Projected 

Expenditures Expenditures Projected 
FY 2000- Through Through June Surplus 

2001 Budget 4/1/2001 30, 2001* (Deficit) 

Workers' Compensation $1,394,399 $1,496,406 $1,968,272 ($573,873) 

The Budget Analyst concurs with the projected deficit of 
$573,873 in Workers' Compensation expenditures. 

3. The requested supplemental appropriation of 
$2,971,186 includes $2,397,313 for Salary, Fringe Benefit, 
Overtime, and Hobday Pay expenditures, plus $573,873 
for Workers' Compensation Expenditures. The requested 
amount of $2,397,313 for Salary, Fringe Benefit, 
Overtime, and Hobday Pay expenditures, is $715,015, or 
23 percent, less than the Controller's projected Salary, 
Fringe Benefit, Overtime, and Hobday Pay deficit of 
$3,112,328. According to Ms. Mariani (Attachment I), the 
Sheriffs Department "bebeve(s) that (the Department) 
will sufficiently reduce overtime through the Sheriffs 
organizational changes, effective 5/14, and the addition of 
22 deputies on 5/26, to end the year within the amount of 
supplemental funding provided". The Budget Analyst 
concurs with the Sheriffs Department projections, based 
on their explanation of adjustments to the Controller's 
projections. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

58 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



4. According to the Sheriffs Department, the Department 
implemented new policies, effective April 30, 2001, to 
reduce the amount of Overtime expenditures for the 
remaining pay periods of FY 2000-2001. These changes 
are explained in the attached memorandum (Attachment 
II), provided by the Sheriffs Department. 

5. On December 20, 2000, the Sheriffs Department 
requested and the Finance Committee approved, a release 
of $1,379,072 previously appropriated and reserved by the 
Board of Supervisors for FY 2000-2001 Overtime 
expenditures (File 00-2047). At that time, the Sheriffs 
Department anticipated that Overtime spending would 
decrease by approximately $30,000 per pay period for the 
balance of FY 2000-2001 because 43 new Deputy Sheriff 
recruits would complete training and be assigned to six 
County Jails, beginning in January of 2001. 

6. The Budget Analyst notes that Overtime expenditures 
per pay period did not decrease between the pay period 
ending January 19, 2001 and the pay period ending April 
27, 2001, although the 43 new Deputy Sheriffs completed 
training and were assigned to County Jails beginning in 
January of 2001. Average Overtime expenditures from 
July 1, 2000 through the pay period ending January 5, 
2001, were $212,155 per pay period. Average Overtime 
expenditures from the pay period ending January 19, 
2001 through the pay period ending April 27, 2001 were 
$215,322 per pay period, or $3,167 per pay period more 
than the average Overtime expenditures per pay period 
from July 1, 2000 through January 5, 2001 1 . As noted in 
Comment 5, the Sheriffs Department represented to the 
Finance Committee on December 20, 2000, that Overtime 
spending would decrease by approximately $30,000 per 
pay period when the 43 new Deputy Sheriffs positions 
were assigned to the County Jails. 

As stated by Ms. Mariani in Attachment I, the Sheriffs 
Department "December projections were overly optimistic, 



1 According to Ms. Mariani, the average overtime expenditure of $215,322 per pay period from the 
pay period ending January 19, 2001 through April 27, 2001, is $3,167, or 1.5 percent more, than the 
average overtime expenditure of $212,155 from July 1, 2000, through the pay period ending January 
5, 2001, because the Deputy Sheriffs received a 1.5 percent Cost of Living Adjustment in January of 
2001. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

59 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

in that they assumed, incorrectly, that (the Sheriffs 
Department) would see a decline in terminations 
beginning in 2001". 

7. In addition to the 43 new Deputy Sheriff positions 
noted above, 22 new Deputy Sheriffs will complete 
training and will be assigned to the County Jails, 
beginning approximately May 26, 2001. 

8. As of May 10, 2001, the Sheriffs Department has 26 
vacant sworn Deputy Sheriff positions, compared to 48 
vacant sworn Deputy Sheriff positions as of December 20, 
2000. According to Ms. Mariani, the Sheriffs Department 
will begin a training program August 13, 2001 for new 
Deputy Sheriff recruits. 

Recommendation: Approve the proposed supplemental appropriation 

ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

60 



itr <s.tiox 1 ('• lb 



SFSD ADM 



City and County of San Francisco /<0^S^> 



OFFICE OF THE SHERIFF 




Attachment I 
Page 1 of 3 



•A Michael Hennessey 

1 21 SHERIFF 

415 ■ 554 - 7225 



May 10, 2001 
Ref: CFO 01-012 



TO: 

FROM: 

SUBJECT: May 16, 2001 Finance Committee File 01-0711 



Budget Analyst's Office 
Jean Mariani/V^' 



Here is the Sheriffs Department response to your request for 
additional information. In your draft report you note that we projected 
overtime spending would decrease by approximately $30,000 per pay 
period beginning in January once 43 new deputies were assigned after 
training. According to our personnel staff, since July 1, 2000, the 
following numbers of deputies became jail ready: 12 on 8/7/00, 1 on 
9/4/00, 11 on 11/6/00, 9 on 12/11/00, 9 on 1/2/01, 5 on 2/25/01, or 
a total of 47 new deputies assigned to duty this fiscal year. We 
currently have 22 deputies in training who will be jail ready on 
5/26/01. In addition to the 38 deputies who left between July 1 and 
December 31, 2000, since January 1, 2001, we have lost an additional 
20 deputies. The difference between deputies trained and deputies 
terminated is a net increase of 11. 

We also have 30 deputies on long-term leave, 45 in academies (who 
will be available for duty in August and September), and 28 vacant 
sworn requisitions (26 deputies, 1 senior deputy, 1 sergeant), for a 
total of 103 positions not available for work out of a total of 816 sworn 
positions, which means we replace more than 10 percent of our sworn 
assignments on overtime, exclusive of vacation, sick leave, 
compensatory time off, training, military and other short-term leaves. 

To put it simply, our December projections were overly optimistic, in 
that they assumed, incorrectly, that we would see a decline in 
terminations beginning in 2001. That has not occurred. 



ROOM 456, CITY HALL 

1 DR. CARLTON B. GC0DLE7T PLACE 



SAM FRANCISCO, CA 94102 
Rjtcjcied Paprr 



FAX 415 - 554 - 7050 



61 



arsu Hun Attachment I 

Page 2 ot 3 



May 10, 2001 

Budget Analyst's Office 

Page 2 



We believe that we will sufficiently reduce overtime through the 
Sheriffs organizational changes effective 5/14 and the addition of 22 
deputies on 5/26 to end the year within the amount of supplemental 
funding provided. 

You also questioned the difference between the Controller's 
projections, which are based on an average of pay periods to date, and 
our estimate. The attached table indicates the differences in the 
projections of approximately $330,000. 

As I previously mentioned to you, we will have preliminary figures on 
the impact of organizational changes on overtime usage available at 
the meeting on Wednesday. 



62 



inn i — xo— ^cnax 17:18 



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TOTAL P. 04 



Attachment II 

San Francisco Sheriff's Department 

INTER-OFFICE CORRESPONDENCE 



TO: AH Personnel a^S^l- — — 

FR: U/S NLA de Souza S^-^Jr\ 

RE: Overtime Costs 

ON: April 30, 2001 






The Department has submitted a supplemental appropriation request for approximately $3 
million in additional overtime for the fiscal year ending June 30, 2001 . Overtime costs have 
continued to increase, primarily as a result of maintaining staff minimums. Over the past 
months, it has become apparent that we cannot continue to sustain this practice. Deputies and 
staff are exhausted and there appears to be no end to the amount of funds needed to just keep the 
department r unnin g. After discussions with the DS A and the Facility/Unit Co mma nders, the 
following changes are in effect: 

Custody Division: 

The Sheriff has reviewed a series of proposals by Chief Dempsey and the Facility Commanders 
to merge two jail facilities into one operation as a further attempt to distribute staff and reduce 
overtime. Effective May 12, 2001, the Sheriff has determined that County Jail 7 will be reduced 
to a two-dorm operation and will operate as an adjunct to County Jail 3. This appears to 
represent the most efficient reduction given the concern for maintaining single cell housing units 
throughout the system. Staff in excess of the number needed to operate County Jail 7 at an 
operationally reduced level, will be assigned to other jail facilities, primarily County Jail 3. 
Other options to reduce the prisoner population are also being considered. 

Effective this date, Supervisory Minimums are suspended. Supervisors will be allowed to work 
in deputy slots, provided the overtime has been posted, volunteers have been requested and it 
appears that involuntary overtime will be required to reach minimum staffing. This is a 
temporary suspension, to be reviewed in 3-4 months. 

Training Programs: 

For the remaining weeks of the JTO Program, both trainer and trainees will be counted against 
the watch minimums. The JTO Program will continue as planned. Trainees will not be subject 
to overtime draft until the program has been completed. The Department remains committed to 
maintaining the integrity of the program and there are no plans to change it in any way that is not 
consistent with improving its development or enhancing its effectiveness. The FTO Program 
will continue through its planning and implementation phases, with the majority of staffing 
impact occurring in the Field Services Division. 



64 



, MfiY-02-2001 11:13 SFSD ADM 4155547050 P. 28/28 

'V '** Attachment I 

Page 'I of. Z _ 

City Hall Security / Warrant Service Unit 

Chief Hennessy and her staff "will be modifying coverage for some designated post positions to 
reduce City Hail Security overtime. This unit currently expends the highest amount of overtime 
since the staffing is approximately 41% below its allotted level. Effective imm ediately, the 
Alternative Programs Division will begin to effect -warrant service through flex scheduling as 
opposed to overtime. FRET support will also be significantly reduced, at least until the end of 
the fiscal year. We will continue to cooperate with the Police Department, but our role will be 
scaled back to a more realistic level. 



These changes are not expected to be permanent, but until the academies graduate and new hires 
are on board, these necessary measures will remain in effect. There are no plans to reduce or 
eliminate any satellite unit assignments. The Sheriff understands how important these gains have 
been to the deputies and the future of the Department This has been a difficult period. 

Thank you for your dedication and co mmi tment 



Pije 2 of2 

65 



TOTfiL P. 28 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Item 11 - File 01-0781 
Department: 

Item: 

Amount: 
Source of Funds: 
Description: 



Mayor's Office 

Bureau of Light, Heat and Power (BLHP), 

Public Utilities Commission (PUC) 

Ordinance appropriating $4,032,000 from the General 
Fund Reserve to fund increased costs for natural gas and 
electricity incurred by the Bureau of Light, Heat and 
Power for General Fund supported departments. 

$4,032,000 

General Fund Reserve 

The proposed supplemental appropriation would provide 
$4,032,000 from the General Fund Reserve to fund the 
increased cost of natural gas and electricity for General 
Fund supported departments. The $4,032,000 would be 
appropriated directly to the Bureau of Light, Heat and 
Power (BLHP), which is responsible for administering the 
supply of electricity, natural gas and steam to City 
departments. According to Ms. Pamela Levin of the 
Controller's Office, because non-General Fund Enterprise 
Fund departments will be able to absorb the increased 
cost of natural gas and steam within their existing 
budgets, Enterprise Fund departments would not be 
funded by the subject supplemental appropriation. 

Attachment I, provided by the Controller's Office, shows 
the amount each General Fund department budgeted for 
energy (which includes electricity, natural gas and 
steam), the amount expended to date, and the estimated 
year-end deficit (see Comment No.l). As shown in 
Attachment I, provided by the Controller's Office, General 
Fund supported departments budgeted a total of 
$10,528,408 for the purchase of energy. According to the 
projections provided by the Controller's Office, General 
Fund supported departments are projected to spend a 
total of $16,973,159 on energy during Fiscal Year 2001- 
2002, which is $6,444,751, or 61.2 percent, more than the 
original budgeted amount of $10,528,408. Ms. Maria 
Jurosek of the Public Utilities Commission (PUC) advises 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

66 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



that 87.6 percent, or $5,642,609, of the projected deficit of 
$6,444,751 results from the additional cost of natural gas. 
The remaining deficit of $802,142, results from the 
increased cost of electricity. Ms. Jurosek advises that any 
additional costs of purchasing steam are negligible. 1 

Of the $6,444,751 deficit in the energy budgets for 
General Fund supported departments, $4,032,000 2 would 
be funded by this supplemental appropriation and 
$2,412,684 would be funded by savings in other line items 
within the budgets for the Department of Public Health 
and the Recreation and Park Department (see Comment 
No. 2). 

Natural Gas 

The PUC purchases natural gas from Pacific Gas and 
Electric (PG&E), which the PUC, in turn, provides to City 
departments at cost, without a surcharge. The proposed 
supplemental appropriation would fund the increased cost 
of natural gas for General Fund supported departments 
during Fiscal Year 2000-2001 resulting from a general 
shortage in natural gas supplies. According to Ms. 
Jurosek, the average price of natural gas during Fiscal 
Year 1999-2000 was approximately $0.30 per therm. 3 
During Fiscal Year 2000-2001, the average price of 
natural gas has increased by approximately $0.70, to 
approximately $1.00 per therm, or a 233 percent increase, 
with the price of natural gas peaking in November of 2000 
at $1.94 per therm. 

Electricity 

The proposed supplemental appropriation would also fund 
the increased cost of electricity to General Fund 
supported Departments. A shortage this year in both 
natural gas and electricity supplies, combined with recent 
volatility in the cost of purchasing wholesale electric 
power, have led to significant increases in the cost of 
purchasing such electric power. However, the majority of 



1 BLHP purchases steam from San Francisco Thermal, a private steam provider, and, in turn, resells 
the steam to City departments at cost. Departments such as the Department of Public Heath and the 
Library use steam for heating. 

2 The proposed supplemental appropriation of $4,032,000 is $67 less than the projected supplemental 
of $4,032,067 shown in Attachment I due to rounding. 

3 A "therm" is equivalent to 100,000 British Thermal Units (BTU). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

67 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 

increased electricity costs are borne by Hetch Hetchy, 
rather than the individual departments, because Hetch 
Hetchy charges City departments set rates for electrical 
power. 4 Hetch Hetchy either generates electricity itself or 
purchases electricity on the market when needed. To fund 
the increased cost of purchasing electrical power for 
resale, 5 the Board of Supervisors approved a 
supplemental appropriation to provide an additional 
$25,400,000 to Hetch Hetchy in March of 2001 for Fiscal 
Year 2000-2001 (File No. 01-0208). In an effort to help 
recover its costs, the Public Utilities Commission 
increased the rate it charges to General Fund supported 
departments, effective January 1, 2001, by $0.00625, from 
$0.03125 to $0.0375 per kilowatt hour, an increase of 20 
percent. The proposed supplemental appropriation would 
fund this rate increase in electricity for General Fund 
supported departments, in addition to the increased cost 
of purchasing natural gas. 

Comments: 1. Attachment I, provided by the Controller's Office, 

shows for each General Fund department the amount 
expended for natural gas and steam as of March 31, 2001 
and the amount expended to purchase electricity as of 
December 31, 2000. Ms. Jurosek advises that BLHP does 
not have more current data on the amount expended to 
purchase electricity because of errors in PG&E's 
accounting of electricity use by City departments, as 
explained further in Attachment II, provided by BLHP. 
BLHP is currently working with PG&E in order to allow 
an accurate accounting of electricity used by the City, 
from January 1, 2001 through March 1, 2001. 

2. As shown in the Attachment I, provided by the 
Controller's Office, the Department of Public Health 



4 The rate charged by BLHP for electrical power to General Fund supported departments, currently 
$0.0375 per kilowatt hour, is established by the San Francisco Public Utilities Commission (PUC). 
The rate charged to Enterprise Fund departments is currently $0.10 per kilowatt hour and is based 
on, and fluctuates with, rates established by the California Public Utilities Commission (CPUC). Ms. 
Jurosek advises that the CPUC increased the retail rate for electricity in January of 2001 by $0.01 
per kilowatt hour, from $0.06 to $0.07 per kilowatt hour, and by an additional $0.03 per kilowatt 
hour in March of 2001, from $0.07 to the current rate of $0.10 per kilowatt hour. 

5 Ms. Jurosek advises that "power for resale" includes power Hetch Hetchy purchases to supply 
electricity to all of Hetch Hetchy's customers, including City departments and tenants on City-owned 
land, as well as to other retail and wholesale customers. Such customers include the Modesto and 
Turlock Irrigation Districts. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

68 



Memo to Finance Committee 

May 16, 2001 Finance Committee Meeting 



Recommendation: 



(DPH) plans to fund a portion of the DPH's projected 
budget deficit for natural gas and electricity with other 
savings in DPH's Fiscal Year 2000-2001 budget. 
According to Ms. Monique Zmuda of DPH, DPH will fund 
an estimated $2,076,000 of the department's projected 
deficit of $3,800,912 with savings from the San Francisco 
General Hospital's budget for Contractual Services, 
resulting from a lower than expected Disproportionate 
Share Payment Program payment to the State for Fiscal 
Year 2000-2001. 6 DPH's remaining deficit of $1,724,912 
for natural gas and electricity would be funded by the 
proposed supplemental appropriation. DPH's high energy 
costs, compared to other City departments, result largely 
from the cost of providing natural gas to San Francisco 
General Hospital and Laguna Honda Hospital to heat the 
facilities and provide hot water for laundry and cleaning. 
Also, as shown in Attachment I, the Recreation and Park 
Department (RPD) plans to fund its entire projected 
deficit of $336,684 with excess Salary savings and some 
operating savings, according to Ms. Mary King-Gorwky of 
RPD. 



Approve the proposed supplemental appropriation. 



//> ' ^/J^Z 



'Harvey M. Rose 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



6 Under the Disproportionate Share Payment Program, established by Senate Bill 855 (SB 855), the 
City is required to make a transfer of funds to the State Department of Health Services (DHS). The 
State obtains matching Federal funds to the funds DPH had transferred to the State, and the 
transferred funds plus the matching Federal funds are then distributed back to the disproportionate 
share hospitals as Medi-Cal revenues based on Medi-Cal patient days of services. The amount that 
the City must transfer to the State DHS is based on a statutory formula. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

69 



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70 



*Att j ».c'hTTient II 



Date: 5/10/01 
Sender Maria Jurosek 
To: Emilie Neumann 

Priority: Normal 
Subject: PG&E data 



Emilie, 

The reason we have not been able to provide departments with usage and billing 

is due to a change of the PG&E CIS program/ computer system in January of 2001, 

they have been unable to provide us with correct data. We have received files 

with some improper reads and read dates, therefore the calculations for the 

usage by meter is incorrect. PG&E is in the process of correcting the data 

for 

January - March of 2 001. 

Maria Jurosek 

Director of Retail Services, HHWP 
(415) 554-3131 



Source: Public Utilities Commission 



71 



K 




City and County of £an Francisco 

Meeting Agenda 

finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: Gail Johnson 



City Hall 
1 Dr. Carlton B Goodlett Place 
San Francisco. CA 94102-4689 



Monday, May 21, 2001 



9:30 AM 

Special Meeting 



City Hall, Room 263 



0.35 

\)o\ 



Note: Each item on the Consent or Regular agenda may include the following documents: 

1) Legislation 

2) Budget Analyst report 

3) Legislative Analyst report 

4) Department or Agency cover letter and/or report 

5) Public correspondence 

These items will be available for review at City Hall, Room 244, Reception Desk. 



Each member of the public will be allotted the same maximum number of minutes to speak as set by 
the Chair at the beginning of each item, excluding City representatives. 



AGENDA CHANGES 



REGULAR AGENDA 



DOCUMENTS DEPT. 

MAY 2 1 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



010848 [Health Plan Benefits - Contractors] 
Mayor 

Ordinance amending the San Francisco Administrative Code by adding Chapter 12Q, encompassing 
Sections 12Q.1 through 12Q.11, to require contractors that provide services to the City or enter into 
certain leases with the City, and certain subcontractors, subtenants and parties providing services to 
tenants and subtenants on City property, with respect to covered employees, to offer health plan 
benefits to employees, to make payments to the City for use by the Department of Public Health, to 
make payments directly to employees under limited circumstances, or to participate in a health 
benefits program developed by the Director of Health. (Mayor) 

5/7/01, RECEIVED AND ASSIGNED to Rules Committee. 

5/14/01, SUBSTITUTED. The Mayor submitted a substitute ordinance bearing same title, and requests this item be 

considered at the May 17. 2001 meeting. 

5/14/01. ASSIGNED to Rules Committee 



ADJOURNMENT 



City and County of San Francisco 



Printed at 12:11 PM on 5/17/01 



Finance Committee Meeting Agenda Monday, May 21, 2001 

IMPORTANT INFORMATION 

NOTE: Persons unable to attend the meeting may submit to the City, by the time the proceeding 
begins, written comments regarding the agenda items above. These comments will be made a part of 
the official public record and shall be brought to the attention of the Board of Supen'isors. Any 
written comments should be sent to Committee Clerk, Finance Committee, San Francisco Board of 
Supervisors, 1 Dr. Carlton B. Goodlett Place, Room 244, San Francisco, California 94102 by 5:00 
p.m. on the day prior to the hearing. Comments which cannot be delivered to the committee clerk by 
that time may be taken directly to the hearing at the location above. 



LEGISLATION UNDER THE 30-DAY RULE 



(Not to be considered at this meeting) 

Rule 5.42 provides that when an ordinance or resolution is introduced which would CREATE OR 
REVISE MAJOR CITY POLICY, the committee to which the legislation is assigned shall not consider 
the legislation until at least thirty days after the date of introduction. The provisions of this rule shall 
not apply to the routine operations of the departments of the City or when a legal time limit controls 
the hearing timing. In general, the rule shall not apply to hearings to consider subject matter when 
no legislation has been presented, nor shall the rule apply to resolutions which simply URGE action 
to be taken. 



010826 [Business Tax and Regulations Code Amendment] 
Supervisor Leno 

Ordinance amending the Business Tax and Regulations Code to (1) clarify general administrative 
provisions of Article 6 thereof, (2) consolidate the deadlines for renewing business registration 
certificates and filing annual tax returns, (3) establish a system of administrative penalties and 
citations for violations of the Business Tax and Regulations Code, (4) eliminate the automatic 
disqualification from the small business exemption for persons that fail to file a timely business tax 
return, and (5) establish a graduated system of penalties for persons that otherwise qualify for the 
small business exemption who fail to file a timely return that is based on how long the return is 
delinquent. (Treasurer-Tax Collector) 

5/2/01. ASSIGNED UNDER 30 DAY RULE to Finance Committee, expires on 6/6/2001. 



City and County of San Francisco 2 Printed at 12:11 PM on 5/17/01 



Finance Committee Meeting Agenda Monday, May 21, 2001 

Meeting Procedures 

The Board of Supervisors is the Legislative Body of the City and County of San Francisco. The Board has 

several standing Committees where ordinances and resolutions are the subject of hearings at which members of 

the public are urged to testify. The full Board does not hold a second public hearing on measures which have 

been heard in committee. 

Board procedures do not permit persons in the audience at a Committee meeting to vocally express support or 

opposition to statements by Supervisors or by other persons testifying. Thus applause and booing are both 

contrary to Board requirements. The Board does not permit signs to be brought into the meeting or displayed in 

the room. Standing in the meeting room is not allowed. 

Citizens are encouraged to testify at Committee meetings and to write letters to the Clerk of a Committee or to 

its members. City Hall, 1 Dr. Carlton B. Goodlett Place. Room 244, San Francisco. CA 94102. 

Agenda are available on the internet at www.ci.sf.ca.us/bdsupvrs.bos.htm. 

THE AGENDA PACKET IS AVAILABLE FOR REVIEW AT CITY HALL, ROOM 244, RECEPTION DESK. 

Board meetings are televised on channel 26. For video tape copies and scheduling call (415) 557-4293. 

Requests for foreign language translation at a meeting must be received by the Clerk of the Board of 

Supervisors at least 48 hours before the meeting. For meetings on a Monday or a Tuesday, the request must be 

made by noon of the last business day of the preceding week. 

Disability Access 

Both the Committee Room (Room 263) and the Legislative Chamber are wheelchair accessible. The closest 

accessible BART Station is Civic Center, three blocks from City Hall. Accessible MUNI lines serving this 

location are: #42 Downtown Loop, and the #71 Haight/Noriega and the F Line to Market and Van Ness and the 

Metro stations at Van Ness and Market and at Civic Center. For more information about MUNI accessible 

services, call 923-6142. 

There is accessible parking in the vicinity of City Hall at Civic Center Plaza and adjacent to Davies Hall and the 

War Memorial Complex. 

The following services are available when requested by 4:00 p.m. of the Friday before the Board meeting: 

For American Sign Language interpreters, use of a reader during a meeting, or sound enhancement system, 
contact Violeta Mosuela at (415) 554-7704. 

For a large print copy of agenda or minutes in alternative formats, contact Annette Lonich at (415) 554-7706. 
The Clerk of the Board's Office TTY number for speech-hearing impaired is (415) 554-5227. 
In order to accommodate persons with severe allergies, environmental illness, multiple chemical sensitivity or 
related disabilities, attendees at public meetings are reminded that other attendees may be sensitive to various 
chemical based products. Please help the City to accommodate these individuals. 

Know Your Rights Under the Sunshine Ordinance 

Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, boards, 
councils and other agencies of the City and County exist to conduct the people's business. The Sunshine 
Ordinance assures that deliberations are conducted before the people and that City operations are open to the 
people's review. For more information on your rights under the Sunshine Ordinance (Chapter 67 of the San 
Francisco Administrative Code) or to report a violation of the ordinance, contact Donna Hall; by mail to Clerk 
of the Board of Supervisors, 1 Dr. Carlton B. Goodlett Place, Room 244. by phone at (415) 554-7724, by fax at 
(415) 554-7854 or by email at Donna_Hall@ci.sf.ca.us 

Citizens interested in obtaining a free copy of the Sunshine Ordinance can request a copy from Ms. Hall or by 
printing Chapter 67 of the San Francisco Administrative Code on the Internet, at 
http://www.ci.sf.ca.us/bdsupvrs/sunshine.htm 



City and County of San Francisco 3 Printed at 12:11 PM on 5/17/01 



FINANCE COMMITTEE 

S.F. BOARD OF SUPERVISORS 

CITY HALL, ROOM 244 

1 DR. CARLTON GOODLETT PLACE 

SAN FRANCISCO. CA 94102-4689 

IMPORTANT HEARING NOTICE!!! 



41 Library 

100 Larkin Street Govt Information Center 



( 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



l r 



lc, 




CITY AND COUNTY [^JmSSaaJs OF SAN FRANCISCO 

ABOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



May 17, 2001 



DOCUMENTS DEPT. 



TO: ^Finance Committee 

FROM: { Budget Analyst 

MAY 2 2 

SUBJECT: May 21, 2001 Special Finance Committee Meeting -am FRANCISCO 
Item 1 -File 01-0848 PUBL,C LIBRARY 

Note: An Amendment of the Whole (AOW) has been introduced on the proposed 
ordinance. The AOW includes six changes which are not anticipated to have any 
General Fund impact. This item was transferred from the Rules Committee at 
its meeting of May 17, 2001. 



Departments: 



Item: 



Department of Public Health (DHS) 
Department of Administrative Services (DHS) 
Purchasing Department 
Office of Contract Administration 

Ordinance amending the San Francisco Administrative 
Code by adding Chapter 12Q, encompassing Sections 12Q.1 
through 12Q.11, to require contractors that provide services 
to the City or enter into certain leases with the City and 
certain subcontractors, subtenants and parties providing 
services to tenants and subtenants on City property, with 
respect to covered employees, to offer health plan benefits 
to employees, to either make payments to the City for use 
by the Department of Public Health or to make payments 
directly to employees under limited circumstances, or to 
participate in a Health Benefits Program developed by the 
Director of Health. 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 

Description: The proposed ordinance would add a new Chapter to the 

City's Administrative Code, Chapter 12Q, to be known as 
the San Francisco Health Care Accountability Ordinance. 
In accordance with this new Chapter 12Q, Health Care 
Accountability Ordinance, specified contractors and 
subcontractors that provide public works, improvements or 
services at the expense of the City, as well as tenants and 
subtenants under leases and subleases on City-owned or 
City-controlled property, would be required to choose 
between offering either (1) health plan benefits to specified 
covered employees or (2) making payments to (a) the City, 
or (b) the specified covered employees. The effective date of 
the proposed ordinance would be July 1, 2001 or 30 days 
after the proposed ordinance is adopted, whichever is later 
(See Comment No. 8). Under the proposed ordinance, 
affected contracts, subcontracts, leases, subleases entered 
into, or amended, after the effective date, may be required 
to include the subject Health Care Accountability 
Ordinance provisions. 

In FY 2001-2002, those covered employees that would be 
entitled to such health plan benefits or payments would 
include: (1) employees of contractors or subcontractors who 
work on a City contract or subcontract for 20 hours or more 
per week or (2) employees of tenants or subtenants who 
work 20 hours or more per week on property covered by a 
City lease or sublease, or (3) employees of contractors or 
subcontractors that have contracts or subcontracts to 
perform services on property covered by a lease or sublease 
if such employees works 20 hours or more per week on the 
property. Effective July 1, 2002, the number of hours per 
week that an employee must work to be covered by the 
proposed ordinance would be reduced from 20 hours to 15 
hours or more per week, a reduction of five hours or 25 
percent (See Comment No 9). 

Those employees that would not be covered by the subject 
ordinance would include: (1) student employees, under the 
age of 18 years, or trainees in certain bona fide training 
programs, provided that such student or trainee employees 
do not replace, displace or lower the wage or benefits of any 
existing employees, (2) employees covered by the City's 
prevailing rate of wages, in accordance with City Charter 
Section A7.204 and Administrative Code Chapter 6, or (3) 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



disabled employees covered by or eligible for a U.S. 
Department of Labor sub-minimum wage certificate. 

The proposed ordinance also specifies various types of 
agreements, contracts and leases which would be exempt 
from the proposed Chapter 12Q provisions, including: (1) 
agreements that extend for less than one year, (2) 
agreements that are predominantly for the purchase or 
lease of goods, or for guarantees, warranties, shipping, 
delivery, installation or maintenance of such goods, (3) 
agreements for settlement of legal proceedings, (4) 
agreements for urgent or specialized advice, consultation or 
litigation services for the City Attorney's Office, if the City 
Attorney finds that it would be in the best interests of the 
City not to include such requirements, (5) agreements for 
(a) less than $25,000 for for-profit contractors and (b) less 
than $50,000 for non-profit contractors; however, if the 
contractor has multiple agreements with the City in a given 
fiscal year, and the cumulative amount of these contracts is 
$75,000 or more, these provisions would apply to each such 
agreement from the date the triggering contract is 
executed, (6) loan agreements or agreements for 
investment, management or use of trust assets, or City 
monies, if compliance would violate the fiduciary duties of 
the trustees, or the City Treasurer, (7) agreements executed 
or pursuant to bid packages or requests for proposals 
advertised prior to the effective date of the subject 
ordinance, unless amended, (8) agreements involving the 
expenditure of Special Funds or other Non-General Fund 
revenues to the extent that application of this provision 
would require the City to use General Fund monies to 
supplement the Special Funds or other Non-General Fund 
revenues to maintain the current level of services, (9) 
agreements that require grant fund expenditures awarded 
to the City by another entity, with regards to such grant 
funds, (10) agreements pursuant to which the City awards 
a grant to a nonprofit corporation, (11) agreements with 
public entities, unless that public entity is the San 
Francisco Redevelopment Agency, San Francisco Local 
Agency Formation Commission (LAFCO), San Francisco 
Transportation Authority, San Francisco Parking Authority 
or the San Francisco Health Authority, (12) agreements for 
employee benefits for City employees, if the Director of 
Human Resources finds no entity to comply with these 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



provisions, (13) agreements for services to tenants or 
subtenants provided for less than 130 days within a 12- 
month period, or leases of less than 29 consecutive days in 
any calendar year, (14) leases that do not provide exclusive 
use of the property to the tenant, (15) agreements granting 
franchises or easements, revocable at-will use or 
encroachment permits on City property, street excavation, 
construction or use permits or agreements for the use of a 
City right-of-way, and (16) agreements for using City 
property under the jurisdiction of Recreation and Park 
primarily for recreational activities (excluding business 
operations that provide recreational or entertainment 
activities). 

In addition, if a for profit employer has 20 or fewer 
employees, or a non-profit employer has 50 or fewer 
employees, that employer would not be obligated to comply 
with the subject provisions. In accordance with the 
proposed ordinance, all employees of all of the employers' 
parent organizations and subsidiaries would be included in 
the count for determining the total number of employees. 

Under the proposed ordinance, for employees that live in 
San Francisco or provide services in San Francisco or at the 
San Francisco Airport or San Bruno Jail , the specified 
employers (i.e., contractors, subcontractors, tenants, 
subtenants, etc.) would have the following three options for 
providing the required health care benefits: (1) offer 
covered employees health plan benefits that meet the 
minimum standards prepared by the Director of Public 
Health and approved by the Health Commission (See 
Comment No. 5), (2) pay $1.50 per hour to the City for each 
hour the covered employee works on the subject City 
contract or subcontract or property covered by a lease, with 
such payment not to exceed $60 per week, or the equivalent 
of the employee working 40 hours per week for each week 
that the covered employee works the minimum number of 
hours on a City contract or City property, (3) participate in 
a Health Benefit Program developed by the Director of 
Public Health and approved by the Health Commission 
(See Comment No. 6). 

Under the proposed ordinance, for employees who do not 
live or provide services in San Francisco, or at the San 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



Francisco Airport or San Bruno Jail, the specified 
employers (i.e., contractors, subcontractors, tenants, 
subtenants, etc.) would have the following two options for 
providing the required health care benefits: (1) offer 
covered employees health plan benefits that meet the 
minimum standards prepared by the Director of Public 
Health and approved by the Health Commission (See 
Comment No. 5), or (2) pav $1.50 per hour to the covered 
employee for each hour the covered employee works on the 
subject contract or subcontract or property covered by a 
lease, with such payment not to exceed $60 per week, or the 
equivalent of the employee working 40 hours per week, for 
each week that the covered employee works the minimum 
number of hours on a City contract or City property. This 
provision is intended to enable the employee to obtain their 
own health insurance coverage. 

In terms of administering and enforcing the subject 
ordinance, the Director of Purchasing, in consultation with 
the Department of Public Health, would be responsible for 
promulgating such regulations, after holding a public 
hearing on the matter. In addition, the Director of 
Purchasing, in consultation with the City Attorney, would 
develop the specified contractual provisions that need to be 
used by each City department for inclusion in their 
contracts and leases. The Director of Purchasing may audit 
contractors and investigate complaints of noncompliance. If 
the Director of Purchasing determines that a contractor has 
violated Chapter 12Q, the Director may: (1) charge the 
offending employer the amounts that should have been paid 
to the City, including interest, (2) assess liquidated 
damages of $50 per day for each covered employee each day 
that the offending employer failed to pay the City the 
required amounts, (3) set off the amount that the offending 
employer owes to the City against the amounts due to the 
contracting party, (4) terminate the contract or lease in 
whole or in part, or (5) bar the offending employer from 
entering into future contracts or leases with the City for 
three years. 

In addition to the exemptions discussed above, the Director 
of Purchasing, in consultation with the Department of 
Public Health, may waive the requirements of the proposed 
Chapter 12Q for the following reasons: (1) there is only one 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 

prospective contractor or tenant, or for sole source 
contracts, (2) emergency situations, (3) there are no 
qualified responsive bidders for a service, lease or project 
that is essential to the City, (4) there would be an adverse 
impact on services or an unreasonable adverse financial 
impact on the City. Such waivers would only be effective for 
the duration of that contract or lease period. Under 
specified conditions, the General Manager of the Public 
Utilities Commission could also waive the requirements of 
the subject Chapter 12Q for certain contracts for the 
provision, conveyance or transmission of wholesale or bulk 
water, electricity or natural gas and other ancillary 
requirements, provided that the purchase of such services 
cannot be accomplished through the City's standard 
competitive bidding procedures and the contractor or 
subcontractor is not providing direct, retail services to end 
users within the City. 

Under the proposed ordinance, each contractor would be 
responsible for its subcontractors and each tenant would be 
responsible for each subtenant, contractor and 
subcontractor performing services on property covered by 
the tenant's lease, with respect to compliance with this 
ordinance. 

The Director of Purchasing and the Department of Public 
Health would be required, under the proposed ordinance, to 
provide an annual joint report to the Board of Supervisors 
on the City's compliance with, this Chapter, including 
cumulative information on the number of waivers granted. 

Comments: 1. The proposed ordinance states that employers should be 

primarily responsible for offering health care benefits to 
their employees to enhance the quality of services provided. 
The proposed ordinance would require that specified City 
contractors, subcontractors, tenants and subtenants on City 
property provide health benefits directly or pay for such 
benefits for their covered employees. The proposed 
ordinance also states that the City has a significant 
interest in reducing the costs it incurs in providing medical 
care to uninsured individuals at San Francisco General 
Hospital and other City health care facilities. Although the 
DPH cannot separate the costs of providing care for 
uninsured individuals from indigent individuals, currently, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



according to Ms. Monique Zmuda of DPH, the City provides 
health care directly to both uninsured and indigent 
individuals through San Francisco General Hospital and 
other City Department of Public Health clinics at an 
estimated cost of approximately $180 million annually. Ms. 
Taylor Emerson of the Mayor's Office advises that based on 
the most recent survey that was conducted three years ago 
for the Mayor's Blue Ribbon Committee on Universal 
Health Care, there are approximately 130,000 uninsured 
individuals in San Francisco. 

As shown in Attachment I provided by Ms. Emerson, an 
estimated 16,050 of uninsured workers would benefit from 
the proposed ordinance. This includes 1,900 for profit 
contractors, 2,650 non-profit contractors, 5,750 Airport 
tenants and 5,750 tenants on other City property (Port, 
PUC, etc.) 

2. In accordance with the proposed ordinance, the $1.50 per 
hour payment to the covered employee, not to exceed $60 
per week, represents the City's current estimate of the 
average cost to obtain individual health insurance benefits. 
The $1.50 per hour payment to the City, not to exceed $60 
per week, is intended to partially offset the City's cost to 
provide health care to uninsured workers. The proposed 
ordinance also states that the Health Commission may 
increase this $1.50 hourly rate and $60 per week 
maximum, in accordance with the U.S. Department of 
Labor's Bureau of Labor Statistics Consumer Price Index 
for Medical Care in the San Francisco Bay Area or such 
other factors the Health Commission finds appropriate in 
order to track the cost of obtaining individual health 
insurance, provided that the Health Commission shall take 
this action no more than once a year. The Budget Analyst 
notes that this provision, to increase the $1.50 hourly rate 
and $60 per week maximum amount would result in 
changes to the proposed ordinance, which should be subject 
to the Board of Supervisors approval. Therefore, the Budget 
Analyst recommends that the proposed ordinance be 
amended to reflect that such changes would be subject to 
approval by the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



3. As shown the Attachment II, provided by Ms. Emerson, 
the proposed ordinance is estimated to cost approximately 
$3,995,084 in FY 2001-2002, including approximately 
$1,318,460 from for profit contractors and subcontractors 
and $2,676,625 from non-profit contractors and 
subcontractors. Such additional costs are a result of various 
City departments being required to pay more for contracts 
and subcontracts, since the contractors and subcontractors 
would pass through to the City the employers' additional 
costs of providing such health care benefits to their 
employees. Ms. Emerson advises that if the proposed 
ordinance is approved, the Mayor's Office would fund an 
additional $4 million for General City Responsibilities to 
cover such additional expenditures Citywide. 

It should be noted that there would be no increased costs to 
the City for those employees of leases or subleases since 
there is no pass-through mechanism under such leases or 
subleases. However, the Budget Analyst notes that 
requiring leases and subleases to provide health benefits to 
employees will likely result in increased costs for such 
employers, and may ultimately reduce the amount of 
revenues paid to the City, under such leases and subleases, 
particularly at the Port and Airport. Ms. Emerson advises 
that, as of the writing of this report, such potential revenue 
losses have not been estimated. 

As shown in Attachment II, comparable costs of $3,995,084 
are estimated to be incurred in FY 2002-2003 and in FY 
2003-2004 an estimated $3,727,422 is estimated to be 
incurred. Ms. Emerson advises that a slightly lower cost is 
estimated in the third year, as it is assumed that 
approximately ten percent of the non-profit providers will 
begin absorbing the additional costs for health care and not 
pass through all such costs to the City. As shown in the 
Attachment, the estimated three-year additional cost to the 
City from the proposed legislation is approximately 
$11,717,590. 

In addition, Ms. Emerson advises that the proposed 
ordinance is estimated to generate approximately $550,000 
of new revenues during the first year for DPH from the 
$1.50 per hour paid to the City for each hour that 
employees work on the subject City contract or subcontract 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

8 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



or property covered by a lease. The Budget Analyst notes 
that all such revenues would be subject to the Board of 
Supervisors appropriation approval. According to Ms. 
Emerson, the estimated additional $550,000 of revenues 
would be deposited into a separate account and used to 
offset a portion of the required salary savings for primary 
care clinics in the Community Health Network, permitting 
the Department of Public Health to hire additional staff 
into currently budgeted positions, that would otherwise 
remain vacant. According to Ms. Emerson, revenue 
projections for the DPH after the first year cannot be 
determined at this time, since it will depend on how quickly 
the Health Benefits Program can be implemented, the 
number of employers that decide to provide their own 
health insurance coverage or enroll in the Health Benefits 
Program as well as the cost of that Program. 

In terms of noncompliance with this legislation, the 
proposed ordinance provides that the City may (1) charge 
the offending employer the amounts that should have been 
paid to the City, including interest, (2) assess liquidated 
damages of $50 per day for each covered employee each day 
that the offending employer failed to pay the City the 
required amounts, (3) set off the amount that the offending 
employer owes to the City against the amounts due to the 
contracting party, or (4) assess other nonmonetary 
provisions. Ms. Emerson advises that, as of the writing of 
this report, the Mayor's Office cannot estimate the amount 
of additional revenues that may be received from such 
remedies. The proposed ordinance states that any revenues 
received from violations of this Chapter would first be used 
to cover the costs of enforcement and thereafter 
appropriated for the use of the Department of Public 
Health. The Budget Analyst notes that all such revenues 
would be subject to the Board of Supervisors appropriation 
approval. 

4. The proposed ordinance states that, if the City creates an 
Office of Contract Administration (OCA), the respective 
Director of the OCA would assume the administrative and 
enforcement responsibilities of the subject Health Care 
Accountability Ordinance. The Budget Analyst notes that a 
supplemental appropriation ordinance and salary 
ordinance (Files 01-0677 and 01-0678) are currently 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



pending before the Board of Supervisors to create and fund 
an Office of Contract Administration in the Department of 
Administrative Services. Based on the recommendations of 
the Finance Committee on May 9, 2001, the proposed new 
Office of Contract Administration would include seven new 
positions, including two Contract Compliance Officer II, 
three Contract Compliance Officer Is, one Management 
VIII and one Senior Clerk Typist, at an estimated 
maximum annual salary and fringe benefit cost of $672,922 
to administer the Minimum Compensation Ordinance, the 
subject Health Care Accountability Ordinance and the 
prevailing wage provisions of the Administrative Code. 
Based on the Budget Analyst's recent review of this 
supplemental appropriation request and accompanying 
Salary Ordinance, OCA does not have any information 
regarding the number of contractors and covered employees 
that would be subject to the proposed Health Care 
Accountability Ordinance. Therefore, the Budget Analyst 
advises that no additional positions should be funded for 
this new program until details of the expected workload 
and performance objectives for the Health Care 
Accountability Ordinance are developed. 

5. Although the proposed ordinance requires that the 
Director of DPH prepare and the Health Commission 
approve minimum standards for a health plan, as of the 
writing of this report, such minimum standards have not 
yet been prepared. Under the proposed ordinance, if the 
Health Commission has not approved minimum standards 
for such health plan benefits by the effective date of this 
ordinance, the Director of Purchasing may suspend 
enforcement of this Chapter for a period of up to 30 days to 
provide sufficient time for the Health Commission to take 
such actions. According to Ms. Tangerine Brigham of DPH, 
such minimum standards are currently being developed 
based on reviews of the existing range of health benefits, 
not including dental or vision benefits, provided by such 
providers as Kaiser Permanente, HealthNet, Blue 
Cross/Blue Shield, etc. Ms. Brigham advises that such 
minimum standards are anticipated to be brought to the 
Health Commission for review and approval in June of 
2001. The Budget Analyst notes that the proposed 
ordinance does not allow for subsequent review or changes 
to these minimum standards. Based on discussions with 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

. 10 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



Ms. Brigham regarding this issue, the Budget Analyst 
recommends that the proposed ordinance be amended to 
permit review and possible changes in the minimum 
standards every two years, to insure that such minimum 
standards are in compliance with State and Federal 
regulations, and existing health benefit practices. 

6. The proposed ordinance also states that the Director of 
Public Health has 12 months from the time the proposed 
ordinance is finally approved to seek the Health 
Commission's approval of a Health Benefits Program. Ms. 
Brigham advises that a Health Benefits Program would 
enable those private and non-profit employers who have 
difficulty purchasing health insurance on the open market 
for their employees to participate in a pool with other 
employers in order to collectively purchase health 
insurance benefits for their employees. In developing this 
Program, the proposed ordinance states that the Director of 
Public Health shall (a) attempt to make health coverage 
available for uninsured covered employees and, if feasible, 
for other uninsured City residents, (b) use public health 
facilities to the maximum extent practicable, (c) make the 
program economically viable and (d) provide a mechanism 
for funding which relies, as much as possible, on 
contributions by participating employers and employees. 
Ms. Brigham advises that the proposed Health Benefits 
Program would have to be licensed by the State of 
California, and such licensing can take up to six months for 
approval. The costs to employers of the proposed Health 
Benefits Program will depend on how many employers 
require participation, the number of employees involved, 
the level of health benefits provided and various other 
factors such that the costs cannot be estimated at this time, 
according to Ms. Brigham. 

7. Mr. Errol Fitzpatrick, the City's Risk Manager advises 
that the proposed ordinance provides sufficient risk 
management protections for the City. 

8. The proposed ordinance's effective date is July 1, 2001 or 
30 days after the proposed ordinance is adopted, whichever 
is later. Ms. Emerson advises that if the proposed 
ordinance is effective by at least July 1, 2001, all of the new 
or renewed contracts and leases, which take effect with the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 

new fiscal year on July 1, 2001, would be subject to the 
proposed ordinance. However, if the proposed ordinance 
does not become effective until after July 1, 2001, most City 
contracts and leases would not be subject to the proposed 
provisions until the following fiscal year, beginning on July 
1, 2002. 

9. The proposed ordinance would require private and non- 
profit contractors, subcontractors and lessors to provide or 
pay for health care benefits for their covered employees who 
work at least 20 hours per week, beginning on the effective 
date of the proposed ordinance. Effective July 1, 2002, or 
approximately one year later, the number of hours that an 
employee must work to be covered by the proposed 
ordinance would be reduced from 20 hours or more per 
week to 15 hours or more per week, a reduction of five 
hours or 25 percent. However, the Budget Analyst notes 
that, based on a recent review of various Memorandum of 
Understandings (MOUs) between the City and employee 
represented organizations, the City currently provides 
health care benefits to City workers who work a minimum 
of 1,040 hours per year, or the equivalent of at least 20 
hours per week. Therefore, the Budget Analyst raises the 
equity issue that the proposed ordinance would require 
private and non-profit employers, as of July 1, 2002, to 
provide a higher level of health care benefits to their 
employees than the City currently provides to its own 
employees. If the proposed ordinance is approved with this 
provision, the Budget Analyst believes that City employee 
organizations will request comparable provisions in next 
year's negotiations. Ms. Emerson advises that such a 
change in City negotiated MOUs would result in an 
estimated additional cost of approximately $3,171,060 1 
annually for the City. 

Recommendations: 1. Amend the proposed ordinance in Section 12Q.3 on page 
12, to require that increases in the hourly rate and 
maximum pay per week would be subject to the Board of 
Supervisors approval, since the proposed ordinance permits 
the Health Commission to authorize increases to the 



1 Estimated additional costs of $3,171,060 is based on 1,338 employees who currently work between 
15 and 20 hours per week times $2,370, which is the current annual cost per employee for City 
health benefits. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Memo to Finance Committee 

May 21, 2001 Special Finance Committee Meeting 



subject $1.50 hourly rate and $60 per week maximum 
amount, as discussed in Comment No. 2 above. 

2. Amend the proposed ordinance in Section 12Q.10 on page 
19, to enable a review of the minimum standards every two 
years, to insure that such standards stay current with 
State and Federal regulations and existing health benefits 
practices, as discussed in Comment No. 5 above. 

3. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors. 




tarvey M. Rose 



V> 



cc: Supervisor Gonzalez 
Supervisor Hall 
President Ammiano 
Clerk of the Board 
Controller 
Stephen Kawa 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Attachment I 
S0'd "IblOl 

Healthcare Accountability Ordinance 

The Healthcare Accountability Ordinance will add a new condition to the City's lease 
agreements and contracts requiring that all employers on City-owned property or serving the city 
on service contracts either: 

• provide health insurance to their employees 

• pay the City $1.50/hour to offset the costs of providing health care to the uninsured through 
the Department of Public Health 

• participate in a newly created City health benefits program 

The Ordinance directs the Department of Public Health to establish a new health benefits 
program within one year that will make insurance available for both workers covered under this 
ordinance and other uninsured City residents. 

Estimated Number of Uninsured Workers to Benefit: ___ln,Q50- 



Airport Tenants 5,750 

Tenants of other City property (Port, PUC, etc) 5,750 

For Profit Service Contractors 1,900 

Non Profit Service Contractors 2,650 

Estimated Number of Uninsured Workers in SF: 130,000 

The Healthcare Accountability Ordinance will take effect over time as contracts and leases are 
newly agreed to or existing agreements are amended. 

Estimated Cost to the City: $4 M annually for next three yrs 

or S12 million total 



14 
qctq msc ct* 3niibnsi33-i i3Dana saoAdw ts:60 imz-v\-kw» 



Attachment II 



Cost Estimate of Proposed Health Accountability Ordinance 



Assumptions 

Leaseholders cannot pass through costs 

All service contract workers are covered 

For Profit - phased in over three years 

For Profit - 43% of FT workers uninsured 

For Profit - 85% of PT workers uninsured 

For Profit - 65% pass through in year one 

Non Profit - phased in over two years 

Non Profit - 43% of FT workers are uninsured 

Non Profit - 67% of PT workers are uninsured 

Non Profit - 1 00% pass through in year one 

Non Profit - 90% pass through in second renewal 

100% of PT workers will be covered at 20 hours 

Pass through cost = $1 .50/hr 

FT = 2080, PT= 1040 



Potepan dat 


a from 1999 
Total Service 


Contractors 


FT 


AVERAGE 

PT 


Total 


PASS 
THROUGH 


For Profit 
Non Profit 


2,762 
3,685 


1,841 
3.937 
5,778 


4,603 
4.860 


COST 
TO 
CITY 




9,463 


FY 01-02 








FT 


PT 


Total 




For Profit 
Non Profit 








1,222,815 
619,148 


805,585 
2,057,476 


2,028,400 
2,676,625 


1,318,460 
2,676,625 








Total Cost 


1,841,963 


2,863,061 


4,705,024 


3,995,084 


FY 02-03 








FT 


PT 


Total 




For Profit 
Non Profit 








1,222,815 
619,148 


805,585 
2,057,476 


2,028,400 
2,676,625 


1,318,460 
2,676,625 








Total Cost 


1,841,963 


2,863,061 


4,705,024 


3,995,084 


FY 03-04 








FT 


PT 


Total 




For Profit 
Non Profit 








1,222,815 
619,148 


805,585 
2,057,476 


2,028,400 
2,676,625 


1,318,460 
2,408,962 








Total Cost 


1,841,963 


2,863,061 


4,705,024 


3,727,422 



Grand Total Cost 



11,717,590 



15 



5/14/01 



City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, May 23, 2001 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:12 a.m. 

010829 [Reserved Funds, Aging and Adult Services] 

Hearing to consider release of reserved funds, Department of Aging and Adult Services (File 010370, 

Ordinance No. 60-01), in the amount of $1,000,000 to fund infrastructure allocations. (Adult and Aging 

Services) 

5/2/01 , RECEIVED AND ASSIGNED to Finance Committee. Department requests this item be scheduled for consideration at the May 

16,2001 meeting. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Clark, Deputy Director. Aging and Adult 
Services Department; Derrick Lam; Vera Hale, Commission on Aging, Finance Committee; Richard Ow, 
Asian American Elderly Society; Bernie Rush. 
Release of reserved funds in the amount of $985,000 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010409 [Equal Access to Services] 

Supervisors Leno, Gonzalez, Sandoval, Yee, Ammiano, Peskin, Maxwell, Daly, McGoldrick 

Draft ordinance amending San Francisco Administrative Code by adding Chapter 89 to require City 

departments to offer bilingual services and materials if a substantial or concentrated portion of the public 

utilizing their services does not speak English effectively because it is not their primary language. 

3/5/01, RECEIVED AND ASSIGNED to Rules Committee. 

5/14/01, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Nathan Purkiss, Administrative Assistant to Supervisor Leno; Har\'ey Rose, 

Budget Analyst; Vik Maholtra, Policy Analyst, Chinese for Affirmative Action; Dan; Dang Pham, Executive 

Director, Immigrant Rights Commission; Nichole Truax, Human Rights Commission; Janelle Wong, Human 

Rights Commission; Female Speaker, Fair Housing Investigator, Human Rights Commission; Danya 

Fernandez, Employment Law Center; Mrs. Wong; Male Speaker; Richard Gale.SElU Local 790; Diana Lau. 

Immigrant Rights Commission; Audrey Fong, Asian Women's Shelter: Lana Huong, Asian Women's Shelter; 

Victor Seto; Chris Bowman, Citizens Advisory Committee on Election; Rubin Garcia; Vera Hale, Immigrant 

Rights Commission; Erin McGrath, Mayor's Budget Office. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 



City and County of San Francisco 



Printed at 2:25 PM on J 3 04 



Finance Committee 



Meeting Minutes 



May 23, 2001 



Ordinance amending San Francisco Administrative Code by adding Chapter 89, Sections 89.1 through 89.14, 
to require City departments to offer bilingual services and materials if a substantial or concentrated portion of 
the public utilizing their services does not speak English effectively because it is not their primary language. 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010681 [Lease, Beach Chalet] 
Supervisor Yee 

Resolution approving and authorizing the execution and delivery of a First Amendment to Lease for the Beach 
Chalet allowing for the construction of a deck at the rear of the building. 
4/16/01, RECEIVED AND ASSIGNED to Finance Committee. 
Speakers: None. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010763 (Appropriation, Infrastructure Projects in Golden Gate Park] 
Supervisors Newsom, Sandoval 

Ordinance appropriating $16,998,742 of the Golden Gate Park Bond Proceeds to fund the construction and 
renovation activities associated with the MLK Utilities Project, North and South Lake project and the Golden 
Gate Park East Entrance for the Department of Recreation and Park for fiscal year 2000-01. (Controller) 

(Fiscal impact.) 

4/25/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Gary Lawyer, Recreation and Park 
Department; Edward Harrington, Controller. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010667 | Airport Lease Agreement Modification for United Airlines, Inc.] 

Resolution approving Lease Modification Number Fifteen for Lease No. 82-0126 between United Airlines, Inc. 

and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 

4/1 1/01 , RECEIVED AND ASSIGNED to Finance Committee. 

5/2/01, CONTINUED. Heard in Committee, Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Airport. 

Continued to May 9, 2001 . 

5/9/01 , CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Airport; Edward Harrington, 

Controller. 

Continued to May 23, 2001. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Government Affairs 

Administrator, Airport; Theodore Lakey, Deputy City Attorney; John Bardis. 

Amended on line 15, after "project, " by adding "and deletion of approximately 462 square feet of the 

International Terminal as exclusive use space. " 

AMENDED. 

REFERRED WITHOUT RECOMMENDATION by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 









City and County of San Francisco 



Primed at 2:26 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



May 23, 2001 



010822 [Airport Lease Modification, Glide Slope Equipment] 

Resolution approving a lease modification for updated glide slope equipment between the Federal Aviation 
Administration and the City and County of San Francisco, acting through its Airport Commission. (Airport 
Commission) 

5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010699 [Treasure Island Fire Training Sublease) 
Supervisor Daly 

Resolution approving a sublease between the City and County of San Francisco (The "City") and the Treasure 
Island Development Authority (The "Authority") for property on Treasure Island generally bounded by 8th 
Street to the south, 1 0th Street to the north, M Street to the west, and N Street to the east for use as a fire 
training facility at an annual rent of $ 1 ,740,000 per year. 

(Fiscal impact; District 6.) 

4/16/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 

Continued to 5/30/01. 

CONTINUED by the following vote: 

Ayes: 2 - Leno, Peskin 

Absent: 1 - Gonzalez 



010549 [Appropriation, funding for uniform firefighters and investigators overtime] 

Ordinance appropriating $2, 1 60,476 from the General Fund Reserve and various departmental revenues to 
fund the cost of uniform firefighters and investigators overtime in the Fire Department for fiscal year 2000-01. 
(Controller) 

(Fiscal impact.) 

3/28/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/16/01, AMENDED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Chief Tobacco, Fire Department; Jim Corrigan; 

Edward Harrington, Controller. 

Amended on page 1 as follows: On lines 2 and 25, by replacing "$2,991,267" with "$2,160,476"; on line 1 1, by replacing "$1,626,267" 

with "$795,476"; and on line 22, by replacing "$2,486,267" with "$1,655,476." 

Continued to 5/23/01. 

5/16/01 , CONTINUED AS AMENDED. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Jim Corrigan: Edward Harrington, Controller. 

Continued to 5/30/01. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance appropriating $2,160,476 from the Airport and various departmental revenues as well as 

reallocating $1,200,000 in Police department appropriations to the Fire department to fund the cost of uniform 

firefighters and investigators salaries and overtime in the Fire Department for fiscal year 2000-01. (Controller) 

(Fiscal impact.) 

CONTINUED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:26 P.\f on .» .» '04 



Finance Committee 



Meeting Minutes 



May 23, 2001 



010825 [Reserved Funds, Police Department] 

Hearing to consider release of reserved funds, Police Department (fiscal year 2000-01 budget), in the amount 
of $1,700,195 to cover recruitment and hiring expenditures. (Police Department) 
5/2/01, RECEIVED AND ASSIGNED to Finance Committee. See File 010200. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Captain John Goldberg, Police Department; 
Fiscal Division; Edward Harrington, Controller. 
Release of reserved funds in the amount of $1,055,173 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010759 [Reserved Funds, Department of Human Services] 

Hearing to consider release of reserved funds, Department of Human Services (fiscal year 2000-01 budget 
"Relocation and Expansion Leases"), in the amount of $81 1,317 to fund the Department's rental expenditure. 
(Human Services Department) 

4/27/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Sally Kipper, Department of Human Services. 
Release of reserved funds in the amount of $807,474 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010731 [Reserved Funds, Administrative Services Department] 

Hearing to consider release of reserved funds, City Administrator, (Convention Facilities Fund, Ordinance No. 
97-95), in the amount of $610,100 for the replacement of security room Audio Visual control equipment at the 
Moscone Center. (Administrative Services Department) 
4/20/01, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 
Release of reserved funds in the amount of $610,100 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010815 [Lease of Property] 

Resolution approving a new lease of real property located at 1667 Market Street on behalf of Administrative 
Services, for the Department of Elections. (Real Estate Department) 

(Fiscal impact; District 6) 

5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/7/01 , SUBSTITUTED. Real Estate Department submitted a substitute resolution bearing new title. 

5/7/01, ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Legnitto, Real Estate Division, 
Department of Administrative Services; Bill Lee, City Administrator; Mary Hobson, Office of City Architect; 
Chris Bowman, Citizens Advisory Committee on Elections. 
Continued to 5/30/01. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:26 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



May 23, 2001 



010816 [Lease of Property] 

Resolution authorizing the lease of 4,945 sq.ft. at 1500 Howard Street for the Department of Public Health. 
(Real Estate Department) 

(District 6) 

5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Legnetto, Real Estate Division, 
Department of Administrative Services; Judy Shotzman, Department of Public Health. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010819 [Contracting out Pretrial Court Diversion Services] 

Resolution approving the Controller's certification that Pretrial Court Diversion Services for Inmates in the City 
and County of San Francisco can practically be performed by private contractor at a lower cost for the year 
commencing July 1, 2001, than if work were performed by City and County employees. (Sheriff) 
5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010820 [Contracting out Arrestees' Own Recognizance Services] 

Resolution approving the Controller's certification that own recognizance services for arrestees in the City and 
County of San Francisco can practically be performed by private contractor at a lower cost for the year 
commencing July 1, 2001, than if work were performed by City and County employees. (Sheriff) 
5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010821 [Contracting out Jail Food Services] 

Resolution approving the Controller's certification that County Jail food service management operations for the 
City and County of San Francisco can practically be performed by private contractor at a lower cost for the 
year commencing July 1, 2001, than if work were performed by City and County employees. (Sheriff) 
5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:26 PM on ! .< 114 



Finance Committee 



Meeting Minutes 



May 23, 2001 



010824 [Reserved Funds, Port] 

Hearing to consider release of reserved funds, Port (File 101-96-83, Ordinance No. 252-97), in the amount of 
$472,390 to fund the Port Facilities Maintenance Management System. (Port) 
5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Stephanie Downs, Finance Manager, Port. 
Release of resen'ed funds in the amount of $472,390 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010827 |Port Lease Agreement] 

Resolution approving a lease agreement with Corzac, Inc. d.b.a. Jelly's - A Dance Cafe and the City and 
County of San Francisco operating by and through the San Francisco Port Commission for restaurant space at 
Pier 50, San Francisco, California. (Port) 
5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Mark Lozovoy, Port. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010830 |Reserved Funds, Port] 

Hearing to consider release of reserved funds, Port (File 101-96-83, Ordinance No. 252-97), in the total 

amount of $926,380 to fund the Pier 34 Demolition Project and construction management. (Port) 

5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/1 1/01 , SUBSTITUTED. Port submitted an amendment to the previous request, adding the amount of $60,000 to fund the cost of 

construction management. 

5/1 1/01, ASSIGNED to Finance Committee. 

Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 
Release of reserved funds in the amount of $926,380 approved. 
APPROVED AND FILED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



ADJOURNMENT 



The meeting adjourned at 1 :55 p.m. 



City and County of San Francisco 



Printed at 2:27 PM on 3/3/04 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



25 
3/o/ 



CITY AND COUNTY 




OF SAN FRANCISCO 



BOARD OF SUPERVISORS 
/ 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



May 17, 2001 



TO: 



{Finance Committee 



FROM: Budget Analyst 

SUBJECT: May 23, 2001 Finance Committee Meeting 

Item 1 -File 01-0829 

Department: Aging and Adult Services 



DOCUMENTS DEPT. 

MAY 2 2 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



Item: 



Amount: 



Source of Funds: 



Description: 



Hearing to consider release of reserved funds for the 
Department of Aging and Adult Services, in the amount of 
$1,000,000 to fund the infrastructure needs of non-profit 
organizations that serve senior citizens. 

$1,000,000 

General Fund Reserve and Surplus FY 2000-01 Parking 
Tax 1 Revenue for Senior Programs, previously 
appropriated and placed on reserve by the Board of 
Supervisors. 

In April of 2001, the Board of Supervisors appropriated 
and placed on reserve a total of $2,000,000, including the 
subject $1,000,000 for infrastructure needs of service 
providers and an additional $1,000,000 to fund identified 



1 Under Article 9, Section 615 of the Administrative Code, one third of all Parking Tax collections, 
excluding the funds allocated to the Municipal Railway, is dedicated to Senior Citizen's Programs. 
The Controller's Six Month Budget Status Report, issued on February 7, 2001 projected increased 
Parking Tax collections of approximately SI. 7 million during FY 2000-2001. Therefore, the 
Controller certified the availability of $561,000 for Senior Citizen's Programs. 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



senior needs, discussed in Comment No. 1 below. This 
$2,000,000 supplemental appropriation was funded by: 

General Fund Reserve $1,439,000 
Surplus FY 2000-01 Parking Tax 

Revenue for Senior Programs 561.000 

Total $2,000,000 

The Board of Supervisors placed the $1,000,000 for 
infrastructure needs on reserve pending completion of a 
Request for Proposals (RFP) process, selection of non- 
profit organizations to receive funding, and submission of 
budget details to the Finance Committee. 

According to Mr. John Clark, Deputy Executive Director 
of the Department of Aging and Adult Services, an RFP 
process was completed in April of 2001 for this first 
$1,000,000 in senior infrastructure needs. Mr. Clark 
advises that the Department of Aging and Adult Services 
plans to fund non-profit service providers for the following 
six categories of infrastructure needs: 

1. Program expense increases (e.g., fuel, supplies, 
printing, raw materials, etc.); 

2. Rent/utility cost increases; 

3. Technology replacement/upgrades (e.g., Personal 
Computers); 

4. Capital Expenditures (e.g., building modifications, 
equipment, etc.); 

5. Personnel-related costs: "wage-push" adjustments 
due to the Minimum Compensation Ordinance, 
salary enhancements; 

6. Training Costs for service provider staff. 

Attachment I, provided Department of Aging and Adult 
Services, describes the RFP process and how funding 
levels were determined for each non-profit organization. 
Mr. Clark advises that the RFP for this first $1,000,000 
was open only to the Department of Aging and Adult 
Services' existing non-profit contract service providers. As 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

2 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

discussed under Comment No. 1 below, an additional 
$1,000,000 in funds will be available for allocation to a 
wider range of organizations. 

Budget: Attachment II, provided by Department of Aging and 

Adult Services, contains a summary budget of the 
proposed $1,000,000 in funds to be allocated to the 38 
non-profit organizations: 

Comments: 1. Mr. Clark advises that the Department of Aging and 

Adult Services plans to request from the Finance 
Committee the release of the additional reserved 
$1,000,000 for identified senior needs in July of 2001. 
According to Mr. Clark, this $1,000,000 will be used to 
direct services for non-profit, community based service 
providers based on a Request-for-Proposal (RFP) 
competitive process with special emphasis on joint 
collaborations between agencies, specific performance 
measures, and proposals serving groups with multiple 
needs. Mr. Clark advises that all eligible organizations, 
and not just existing nonprofit agency contractors, will be 
able to respond to the RFP for the $1,000,000 in 
additional funds. 

2. As stated in Attachment I, funding to non-profit 
organizations for the three categories of: (a) Program 
Expenses, (b) Personnel Expenses, and, (c) Rent/Utility 
Expenses, which are considered on-going costs, the RFP 
instructions contained "stern and explicit warnings that 
the City will in no way be responsible for continuing this 
funding beyond this one grant, and that proposals must 
specifically address how the contractor will provide for 
this need in future years." Staff from the Department of 
Aging and Adult Services have reviewed the proposals 
and believe each of the 38 organizations to be funded has 
demonstrated its ability to continue funding its needs in 
future years, as stated in Attachment I. 

3. Attachment III, provided by Department of Aging and 
Adult Services, contains an estimated breakdown of 
funding by Supervisorial District. As stated in 
Attachment I, "In some cases, it is easy to allocate a 
funding amount to a particular [Supervisorial] district 
(e.g. all funding to Mission Neighborhood Centers is 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Associated with District 9). In other cases, like home- 
delivered meals, it is much more difficult. The amounts in 
this table [Attachment III] were derived from 
[Department of Aging and Adult Services] data, 
information supplied by the providers, and estimates 
made by staff. They should be considered rough 
estimates." 

Recommendation: Approve the proposed release of reserved funds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 




Attachment I 
Page 1 of 1 

City and County of San Francisco department of aging and adult services 

Mayor Watte L Brown, Jr. 
Dr. Sandra Y. Nathan, Executive Director 

JOHN D.R. CLARK 

Commission on the Aging Deputy exkuBvo Director 

Mental Health Conservator Direct Dial: {41 5) 503-2123 

Public Administrator-Public Guardian E-Maa : jchn_dark@ci.sf.ca.ijs 

MEMORANDUM 

TO: KEN BRUCE, Chief Deputy Budget Analyst 

FROM: JOHN CLARK, Deputy Executive Director 

DATE: MAY 15, 2001 

RE: FILE 01-0370 (Supervisor Daly) - RELEASE OF RESERVED FUNDS 

Supervisor Daly 5 s Supplemental Appropriation was passed -with the proviso that the funds be 
placed on Finance Committee Reserve pending the receipt of formal proposals by our 
department. You are in possession of all proposals received for the first 51,000,000 (the 
"infrastructure'' portion of the supplemental), so this memo outlines the process we conducted to 
solicit these proposals. 

Based on direction given to us by Supervisor Daly and members of the Finance Co mmi ttee, we 
proceeded on the assumption that the "infrastructure" portion of the supplemental (the first 
$1,000,000) would be open only to current contractors of the Department of Aging and Adult 
Services (DAAS), while the "ongoing unmet needs" portion of tie supplemental (the second 
S1 3 000,000) would be open to any qualified agency or groups of agencies regardless of current 
status. This distinction was made because the "iiu : Tastructure'' portion was always intended to 
help current (and longtime) contracting agencies better meet their internal needs. 

Process 

The department solicited input from the Commission on the Aging members at their March 27, 
2001 Finance Subwrnmittee meeting, then again at the full Commission meeting on April 4, 
2001. Based on the input received, we conducted a meeting for contractors on April 9, 2001 (see 
attached), where suggestions were again solicited. 

Based on this feedback, we decided that given the wide variance in contract amounts, it made 
sense to divvy up the available funding into bands - e.g., a contractor with a contract amount of 
$750,000 to $999,999 would be eligible to compete for a gram up to $50,000. There was also 
the unanimously stated desire of both policy makers and contractors to have a fast process, given 
that the "infrastructure" funding was designed to meet critical and immediate needs. 
Accordingly, see the April 10, 2001 memo from us to contractors outlining our REP process. 
Proposals were due in to the department on April 20, 2001. 

Results 

The Office on the Aging has 45 contractors. Of those 45, two are other City departments (DPH 
and MOH) and thought by us to be ineligible, as these funds were targeted to the infrastructure. 
25 Van Ness Street, Suite 650, San Francisco, CA 94102 
Principal Number (41 5) 864-6051 Fax Number (41 5) 864-3991 



Attachment I 
Page 2 of. 2 

needs of non-profit provider agencies. Additionally, three other agencies hold limited contracts 
as a result of Board add-backs in last year' s budget process, and were determined to not meet the 
definition of ongoing service providers. Lastly, two agencies chose not to compete. This means 
that 3 8 total proposals were received. 

Unlike the upcomingRFP process for the "ongoing unmet needs" 51,000,000, the proposals 
solicited for the "infrastructure 7 ' 51,000,000 were not so much a competition as they were a 
justificatioa Each of the 38 contractors were eligible to apply for a discrete amount, and 
assuming that their proposals fit into one of the permissible categories and was adequately 
justified, each would receive our recommendation for that funding amount. 

You will note that our REP instructions included a provision for an "additional service request." 
Since we had several agencies choosing not to participate and several others submitting 
proposals for less then their allowable maximum, we had a little over 530,000 left over. So as 
part of the process, we allowed proposers to include supplemental requests in the event that 
funds were left over. Of these requests, staff recommends funding four for a total of 530,445. 

In addition to the memoranda and REP instructions referred to above, you will also find attached 
three tables. The first table shows the list of contractors, the amount they were eligible to 
compete for, and the amount staff recommends to fund. The second table shows the grant 
amounts in the six permissible funding categories: tec hn ology, capital, program, personnel, 
rent/utilities, and training. The third table shows an approximate breakdown in funding by 
Supervisorial District. In some cases, it is easy to allocate a funding amount to a particular 
district (e.g, all funding to Mission Neighborhood Centers is associated with District 9), in other 
cases, like home-delivered meals, it is much more difficult. The amounts in this table were 
derived from our A***, information supplied by the providers, and estimates made by staff They 
should beconsidexed rough estimates. 

Justification for Program. Personnel. Rent/Utility Expenditures 

Note that the supplemental authorized expenditures in the areas of program, personnel, and 
rentAituitics — normally these are ongoing, rather than one-time expenses. Accordingly, the REP 
instructions as well as our memoranda to contractors contain stem and explicit warnings that the 
City will in no way be responsible for continuing this funding beyond this one grant, and that 
proposals must specifically address how the contractor will provide for this need in future years. 

Of the 38 proposals, 19 propose to use their infrastructure grant all or part for one or more of 
these three categories. In most cases, agencies plan to use this one-time only funding within the 
three categories to address unique needs, such a temporary personnel to complete a project, 
paying a balloon payment related to a mortgage (under the "rent" heading), and filling a funding 
gap in a program due to receive additional funding next year. For the most part, the agencies 
choosing to spend in these three categories are larger organizations that have more non-City 
resources to fall back on, and greater private fund-raising capacity. Staff has reviewed these 
proposals and believe their justifications to be adequate. 

Contact Information 

Please feel free to contact me at 503-2123, or alternatively, Darrick Lam, Director, or David 
Newcomer, Program Manager, Office on the Aging at 864-605 1. 



Attachment II 
Page 1 ot 2 



Infrastructure Funding Categories 





Contractor 


Technstcsy 


■ 
Capital 


C 
Program 


D 


E 
RantfUSSBs 


F 
Training 


B 
TOTAL 


1 


Asian American Ederty Humanitarian Society 








l 


n/a 


tAsran Lew Caucus 


15.000 




1 




15.000 


a 


Bayvieiv Hunters-Point MoltipurpcsE-Senior Center 


.... 


rs.oooi 




I • 15,000 


i 


Bemal Kay Ills NesghCarncod Center 


6,000 


1,0001 8,0001 


I 15.Q00 


i CathcBc Chanties 


7,540 


17.295| 


3,000 


27,835 


i 


Centre Latino de San Franciscc 




5.1831 6,257! 10,960 


3,600 


30,000 


7 


Chinese Newcomer 






n/a 




Episcopal Community Services 


5,300 


8,700! 




15,000 


Family Caregivers Alliance 




I I I 


Inc reauest 


Family Service Acencv 


15,000 


25.000! 




40,000 


11 


Filipino American Council of San Francisco 




15,000 [ 




15,000 


C 


Golden Gats Senior Services 




20350! 3,450 






24,000 


a 


Goldman Institube an Aging 


20,000 


10,0001 






30,000 


K* 


In Heme Suacortrve Services Consortium 


4,000 






i 




4,000 


« 


international instaue of San Francisco 


4,000 






I 




4,000 


■ 


Jewish Community Center cf San Francisco 


n/a 


1 


1 




n/a 


T7 


Jewlsn Family and Children's Services 




20,000! 


8.0COI 




23.000 


n 


John w. King Senior Center 




8,0001 








8,000 


ii 


Kfcnoehi Inc 




35,0001 






5,000 


40,000 


X 


Korean Centarlnc 


15.000 


3,000 










18,000 


r 


La Raza Centro Legal 


10,500 


500 






2,000 




13,000 


a 


Laguna Honda Hospital (Work Order) 


n/a 












n/a 


a 


Legal Assistance to the Ederty 


4,761 




4,763 




30,473 




40,000 


M 


Mayor's Office On Housing (Work Oroer) 














n/a 


K 


Weais en Wheels cf San Francisco, Inc 








105,000 






105,000 


* 


Mission Na^hborhcod Canters 


£000 


1 1,000 1 




2,000 


15,000 


rr 


Network for Bders 


600 


I 




19,400 




20,000 


a 


New Leaf Services for Our Community 


. 5,100 


I 


9,900 






15,000 


X 


Nihomachi Legal Outreach 2,600 


2.100! 


3,100 




' '200 


8,000 


5= 


North cf Market Senior Services 




30,000 










30,000 


M 


On Lok Day Services 






30,000 


15,000 


.30,000 




75,000 


=3 


Planning For Bders in the Central City 


2200 


4.000 




1,800 




8.000 


= 


Project Open Hand 




17,8761 17,124 


15,000 




50,000 


e 


Public Transportation Commission (4,520 trips) 




40,0001 






40,000 


as 


Reality House West 


4,000 


1 




4,000 


X 


Russian American Community Services 


7,000 


4.CC0I 6,720 


280 


2,000 


20.000 


n 


San Francisco Adult Day Health Network 5,420 1 


1 




200 


5,620 


u 


San Francisco Food Bank 4,000 


1 






4,000 


W 


San Franciscc Senior Center [Downtown] 12571 


649 






580 


1.200 


15,000 


4C 


Set-Help for the Elderly i 40,000 


60,000 








17,000 


117.D00 


*1 


Senior Action Network - Housing & Empowerment I 4,9001 1,750 


3,445 




1.3501 


a 


Southeast Asian Community Center 










n/al 


« 


Vlstecicn VaJley Community Center 20,000 










20,000 


** 


Western Addition Senior Citizen's Center 2.000 1 35,390 






16101 40.000 


■ 


YVCA of San Francisco 15,000 






1 


15,000 




TOTAL | 183,392 1 380,317 


1 07399 1 179,739 


110,493) 38.16C 


1,000,000 




Percanta E a '_ | 18.34%| 38.03% 


10.79% | 17.9T%| 11.05%| 3.82% 


100.00% 



taCSlMVam- hAjfS3CO-9\ t 



Attachment II 
Page 2 of 2 



One-Time-Only Infrastructure Allocations 





"" 


W 


(Q 


m> 




Con tractor 


Baseline 
BUDGET 
FY 2000-01 


$1,000,000 

Proposed 

Allocation 


Actual 
Request 


1 


Asian American Elderly Humanitarian Society 








n/a 


a 


Asian Law Caucus 


1*1,741 


■15,000 


15,000 


i 


Bayview Hunters-Point Multipurpose Senior Center 


174,568 


15,000 


15,000 


i 


Bemal Heights Neighborhood Center 


128,030 


15,000 


15,000 


2 


Catholic Charities 


430,273 


30,000 


27,935 


I 


Centra Latino de San Francisco 


352,665 


30,000 


30,000 


7 


Chinese Newcomer 








n/a 


» 


Episcopal Community Services 


119,758 


15,000 


15,000 


1 


Family Caregivers Alliance 


8,655 


4,000 


no request 


M 


Family Service Agency 


529,700 


40,000 


40,000 


tl 


Filipino American Council of San Francisco 


140,605 


15,000 


15,000 


a 


Golden Gate Senior Services 


211,725 


20,000 


■ 20,000 


■a 


Goldman Institute on Aging 


454,180 


30,000 


30,000 


1< 


In Home Supportive Services Consortium 


40,709 


4,000 


4,000 


15 


International Institue of San Francisco 


45,150 


4,000 


4,000 


1S 


Jewish Community Center of San Francisco 


427,211 








17 


Jewish FamiJy and Children's Services 


58,064 


8,000 


8,000 


18 


John W. King Senior Center 


56^73 


8,000 


8.000 


IS 


Kjmochi Inc 


722,868 


40,000 


40,000 


» 


Korean Center Inc 


109,504 


15,000 


15,000 


n 


La Raza Centra Legal 


156,743 


15,000 


13,000 


22 


Laguna Honda Hospital (Work Order) 








n/a 


23 


Legal Assistance to the Elderly 


557,606 


40,000 


40,000 


2* 


Mayor's Office On Housing (Work Order) 


-0 





n/a 


u 


Meals on Wheels of San Francisco, Inc 


1,877,485 


105,000 


105,000 


a 


Mission Neighborhood Centers 


165,404 


15,000 


15,000 


27 


Network for Elders 


225,083 


20,000 


20,000 


23 


New Leaf Services for Our Community 


124,626 


15,000 


15.000 


23 


Nihomachi Legal Outreach 


74,369 


8,000 


8,000 


ar 


North of Market Senior Services 


486,495 


30,000 


30,000 


21 


On Lok Day Services 


1,093,170 


75,000 


75.000 


22. 


Planning For Elders in the Central City 


53,494 


8,000 


8,000 


33 


Project Open Hand 


956,937 


50,000 


50,000 





Public Transportation Commission (Work Order) 


682,819 


40,000 


40,000 


il 


Reality House West 


41,489 


4,000 


4,000 


is 


Russian American Community Services 


234,763 


20,000 


20,000 


37 


San Francisco Adult Day Health Network 


■ 86,274 


8,000 


5.620 


23 


San Francisco Food Bank • " ■ 


25,109 


4,000 


4,000 


28 


San Francisco Senior Center (Downtown) 


149,003 


15,000 


15,000 


H 


Self-Help for the Elderly 


2,133,547 


117,000 


117.000 


M 


Senior Action Network - Housing & Empowerment 


81,263 


• 8,000 


8,000 


'2 


Southeast Asian Community Center 








n/a 


<: 


Visitacion Valley Community Center 


231,168 


20,000 


20,000 


•w 


Western Addition Senior Citizen's Center 


641296 


40.000 


40,000 


* 


YMCA of San Francisco 


129,151 


15,000 


15,000 


* 


Jewish Family and Children's Services, nutrition 




20.00C 


20,000 


• 


Golden Gate Senior Services 






4.000 


* 


Korean Center Inc 




3.000 


• 


Senior Action Network - Housing & Empowerment 


3.445 




Direct Service Contracts 


14,339,574 


1.O00.00C 


1,000,000 


* 


denotes additional requests 









8 



Attachment III 
Page 1 of 1 



Commission on the Aging 

FY" 2001-02 Infrastructure Funding 

by Eleven Supervisorial Districts 



Supervisorial District 


# Agencies 


Infrastructure Funds 


1 


7 


$ 124,650 


2 


5 


$ . 51,437 


3 


5 


$ 36,652 


4 


4 


$ 117,750 


5 


4 


$ 28,975 


6 


18 


$ 138,248 


7 


5 


$ 83,902 


8 


3 


$ 69,550 


9 


6 


$ 51,547 


10 


10 


$ 222,028 


11 


5 


$ 75,261 


total 




$ 1,000,000 



Source: Department of Aging and Adult. Services 



F:\HOME\STcUAaiM_inf7ustnjcture_Sup Diatd 5/15/D1 

9 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 2 - File 01-0409 

Note: This item was transferred from the Rules Committee at its meeting of May 
17, 2001. 

Item: Ordinance amending the San Francisco Administrative 

Code by adding Chapter 89 to require City Departments 
to offer bilingual services and materials if a substantial or 
concentrated portion of the public utilizing their services 
does not speak English effectively because it is not their 
primary language. 

Description: The proposed ordinance would amend the San Francisco 

Administrative Code to require City Departments to 
provide bilingual services and materials to the non- 
English speaking public. Under the proposed ordinance, 
City Departments would be required to provide services in 
non-English languages when (a) 10,000 City residents, (b) 
5 percent or more of the clients served by the Department, 
or (c) 5 percent of the residents of the Supervisorial 
District in which the Departments' offices are located are 
limited English-speaking and share a common language. 

The proposed ordinance would require City Departments 
to: 

• Provide written materials in languages spoken by a 
substantial or concentrated portion of the population 
utilizing the Department's services, as described 
below; 

• Employ sufficient numbers of bilingual staff in 
positions working with the public; and 

• Establish a complaint procedure for limited English- 
speaking individuals who are denied government 
services to language or have other complaints about 
the Department. 

Under the proposed ordinance, the Planning Department 
would be required to determine annually whether the 
population in a City Supervisorial District in which a City 
Department is located is limited English-speaking or 
whether the population receiving services from the City 
Department is limited English-speaking. The Pl annin g 



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BUDGET ANALYST 

10 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Department would determine if the limited English- 
speaking population met one of two criteria, as follows: 

• "Concentrated number of limited English-speaking 
persons" means that either 5 percent of the population 
residing in the City Supervisorial District in which a 
City Department is located speak a shared language 
other than English or 5 percent of the population 
receiving a City Department's services speak a specific 
language other than English. 

• "Substantial number of limited English-speaking 
persons" means that either 10,000 City residents or 5 
percent of those receiving a City Department's services 
speak a shared language other than English. 

Under the proposed ordinance, the Planning Department 
would make its determination of the number of limited 
English- speaking individuals residing in a City District or 
receiving services from a City Department by using 
United States Census data. The Planning Department 
would report to the Immigrant Rights Commission (IRC) 1 , 
which is part of the Department of Administrative 
Services (DAS), on the number of limited English- 
speaking individuals in the City by December 1 of each 
year under the proposed ordinance. 

As noted above, City Departments would be required to 
provide written materials in languages spoken by a 
substantial or concentrated portion of the population 
utilizing the Department's services. Specific City 
Departments, called "Tier 1" Departments would be 
required to translate vital documents, such as forms, 
applications, and materials that affect an individual's 
rights into the languages spoken by a "substantial 
number" of hmited English-speaking clients, including: 

(a) applications or forms to participate in the 
Department's programs or activities or to receive 
services, 



1 The Immigrant Rights Commission was established in 1997 as an advisory commission on 
immigrant policy to the Board of Supervisors and the Mayor. The Commission has 15 members, of 
whom 11 are appointed by the Board of Supervisors and 4 are appointed by the Mayor. The 
Immigrant Rights Commission is under the Department of Administrative Services and is staffed by 
an Executive Director and 0.33 FTE Special Assistant 1365. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



(b) written notices regarding the clients' rights 
regarding the Department's decisions, including 
eligibility for services, denial or loss of services, and 
the right to appeal, 

(c) written exams to determine the level of competency 
in a skill or eligibility for a license, not requiring 
English language proficiency, 

(d) written notices regarding provision of language 
services to individuals with limited English language 
proficiency, 

(e) written materials describing the Department's 
programs or services, 

(f) complaint forms, and 

(g) any other applicable documents. 

Tier 1 Departments are: Adult Probation, Department of 
Consumer Assurance, Department of Elections, 
Department of Human Services, Department of Parking 
and Traffic, Department of Public Health, Department of 
Public Transportation, District Attorney, Emergency 
Communications Department, Fire Department, Juvenile 
Probation Department, Police Department, Public 
Defender, Department of Aging and Adult Services, Rent 
Stabilization and Arbitration Board, and Sheriffs 
Department. 

All other City Departments, called Tier 2 Departments, 
providing services to a "substantial number" of limited 
English-speaking clients would be required to translate 
into the language(s) spoken by their clients all publicly- 
posted documents providing information (a) regarding the 
Department's service or programs or (b) affecting the 
clients' rights regarding the Department's decisions, 
including eligibility for services, denial or loss of services, 
and the right to appeal. 

Departments that are required to provide translated 
written materials would have to: 

(a) post notices in the public areas of their facilities in the 
relevant language (s) indicating that written material 
in the language(s) and speaking the language(s) are 
available, 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



(b) designate a staff member with, responsibility for 
ensuring that translations are accurate and 
appropriate for the target audience, and 

(c) comply with the requirements of the ordinance within 
one year. 

Any City Department receiving written materials from 
the Federal or State government in a language other than 
English would be required to keep a sufficient stock of 
those materials for the Department's clients. 

City Commissions and Departments would not be 
required to translate meeting notices, agendas, or 
minutes. However, Commissions and Departments would 
be required to provide oral interpretation of public 
meetings or hearings if requests for oral interpretation 
are made 48 hours prior to the meeting or hearing. 

In addition to the requirement that City Departments 
provide written materials in the languages spoken by a 
"substantial number" of their clients, the proposed 
ordinance would require all City Departments to fill 
public contact positions with bilingual employees if the 
Department's clients include either a "substantial 
number" or a "concentrated number" of limited English- 
speaking individuals. Under this provision, the 
Department would fill vacant positions with bilingual 
employees but would not be required to create new 
positions or dismiss employees to meet the requirements 
of the proposed ordinance. 

The proposed ordinance would require Departments to 
allow individuals to make complaints to the Department, 
either through a written form or by telephone, alleging 
violations of the proposed ordinance by the Department. 
The Departments would be required to document actions 
taken to resolve each complaint and maintain copies of 
complaints and documentation of the complaint resolution 
for five years. 

All Departments with recorded telephone messages about 
the Department's operation or services would be required 
to record the telephone messages in the languages spoken 
by their clients. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Under the proposed ordinance, the Immigrants Rights 
Commission would be responsible for: 

• Conducting outreach to the limited English-speaking 
community regarding their rights under the proposed 
ordinance; 

• Adopting rules and regulations to implement the 
proposed ordinance; 

• Receiving and monitoring the annual compliance plan 
submitted by the City Departments serving a 
"substantial number of limited English-speaking" 
persons; 

• Establishing and implementing a procedure to receive 
and investigate complaints about .violations of the 
proposed ordinance and maintain documents regarding 
complaints; 

• Reviewing complaints received by Departments about 
violations of the proposed ordinance and working with 
Departments to resolve these complaints; and 

• Enforcing compliance with the proposed ordinance, by 
reporting in writing a finding of non-compliance to the 
affected City Department, the Department of Human 
Resources, the Mayor, and the Board of Supervisors. 

Fiscal Impact: Based on documentation provided by the Tier 1 

Departments and the Immigrant Rights Commission, the 
Budget Analyst estimates that implementation of the 
proposed ordinance would result in new costs in FY 2001- 
2002 of approximately $700,175. This estimate includes 
(a) one-time costs of $600,696 for Tier 1 Departments to 
translate written materials into Spanish and Chinese, as 
required by the ordinance, which have not previously 
been translated, plus (b) annual costs of $99,979 for the 
Immigrant Rights Commission (IRC) for outreach to the 
limited English-speaking community, enforcing 
compliance with the proposed ordinance, and additional 
responsibilities, outlined in the proposed ordinance (See 
Comment 5). 

In addition to the estimated $700,175 in increased costs 
noted above, the proposed ordinance would result in 
additional increased costs, as follows: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

14 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



» The City Departments would have increased printing 
costs for printing materials in languages other than 
English. According to information provided by DAS, 
printing costs for black-and-white and some multi- 
color materials in Spanish and Chinese, in addition to 
English, would increase by approximately 5 percent 
over the cost of printing in English only. In addition, 
based on information provided by DAS, printing costs 
for each additional language for higher-quality full- 
color offset printing would equal the initial cost of 
printing in English only. The Budget Analyst is not 
able to estimate the increased printing costs because 
the increased costs would be based on the number and 
type of documents to be printed. 

» All other City Departments, called Tier 2 
Departments, providing services to a "substantial 
number of limited English-speaking" clients would be 
required to translate all publicly-posted materials 
regarding the Department's services and the rights of 
the Department's clients to receive services, as noted 
above. City Departments would incur some new one- 
time costs to comply with this provision of the 
proposed ordinance. The Budget Analyst is not able to 
provide an estimate of these increased costs at this 
time and recommends that the IRC work with the 
affected Tier 2 Departments to develop an 
implementation plan, determining which written 
Department materials would require translation under 
this provision of the proposed ordinance. 

» City Departments would incur increased costs for 
bilingual pay when existing public contact positions 
become vacant and are filled with bilingual employees, 
although the actual amount of these cost increases 
would depend on when existing positions become 
vacant and the rate of bilingual pay for that position 
(see Comment 8). 

» In addition to the estimated $600,696 for translating 
written materials into Spanish and Chinese in FY 
2001-2002, the Departments would have some ongoing 
costs for translating new or revised materials in future 
years, as noted in Comment 3. 

» The cost estimates in this report include estimates for 
translating written materials into Spanish and 
Chinese. The Budget Analyst estimates that City 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 






Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Departments will incur approximately $350,000 in 
additional one-time costs for translating materials into 
each non-English language, other than Chinese or 
Spanish (see Comment 7). 

Comments: 1. Of the estimated $600,696 in new one-time costs for 

translating written documents into Spanish and Chinese, 
the Department of Public Health (DPH) would incur 
approximately $371,219, or 61.8 percent of this $600,696, 
for translating such written materials, according to Mr. 
James Alexander of the DPH. This amount of $371,219 
includes $300,000 for translation and $71,219 in salary 
and fringe benefit costs for one Assistant Health Educator 
position to coordinate translation of the written materials. 
Such funds are not included in the DPH budget, and 
funds to pay these additional costs, including the 
Assistant Health Educator position, which would be 
designated limited-tenure, would be subject to Board of 
Supervisors approval. 

2. Of the estimated $600,696 in new one-time costs for 
translating written documents into Spanish and Chinese, 
the Department of Human Services (DHS) would incur 
approximately $149,870, or 24.9, for translating such 
written materials, according to Ms. Jeanne Zarka of DHS. 
Such funds are not included in the DHS budget and funds 
to pay these additional costs would be subject to Board of 
Supervisors approval. 

3. Although the estimate of $600,696 represents new one- 
time costs for translating materials, the City 
Departments would incur ongoing annual translation 
costs for producing new or revised written materials. The 
Budget Analyst is not able to provide an estimate of on- 
going costs at this time because such costs would vary, 
based on the need of each Department to revise or 
produce new written materials. However, it should be 
noted that DHS has requested $140,130 in the FY 2001- 
2002 budget for translation costs, which are in addition to 
the estimated $149,870 in translation costs resulting from 
the proposed ordinance (as noted in Comment 2). The 
Department of Elections has requested $163,000 in the 
FY 2001-2002 budget for translation costs. Two other 
Departments, the Police Department and DPH, state that 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



their Departments frequently produce new written 
materials but were not able to provide estimates of the 
costs because these Departments have not yet determined 
what new written materials would be produced. 

4. The Budget Analyst recommends that the Immigrant 
Rights Commission (IRC) work with the Tier 1 and Tier 2 
Departments to develop an implementation plan for 
translating written materials under the proposed 
ordinance. The implementation plan would include 
determining which documents need to be translated 
under this provision of the proposed ordinance, assisting 
the Departments with determining priorities, establishing 
a timeline for translating materials, and avoiding 
duplication of documents 

5. As noted above, cost estimates for the Immigrant 
Rights Commission (IRC), provided by Mr. Dang Pham of 
the IRC, include (a) $50,000 for community-based 
organizations to conduct outreach in FY 2001-2002 to the 
limited-English speaking community and (b) $49,979 in 
salary and fringe benefit costs to increase an existing 0.33 
FTE Special Assistant 1365 by 0.67 FTE, to create a full- 
time position, for total annual costs of $99,979. The 
attached memorandum (Attachment), provided by the 
IRC, contains an explanation of this cost estimate. 

6. The proposed ordinance requires the Planning 
Department to determine annually whether the 
population in a City Supervisorial District in which a City 
Department is located is limited English-speaking or 
whether the population receiving services from the City 
Department is limited English-speaking. Under the 
proposed ordinance, the Planning Department would 
make this determination by using United States Census 
data. The estimates in this report are based on the costs 
of translating materials into Spanish and Chinese. The 
inclusion of languages in addition to Spanish and Chinese 
has not yet been determined. 

7. Based on the documentation provided by the Tier 1 
Departments, the Budget Analyst estimates that the one- 
time new costs for City Departments for each additional 
language included in the proposed ordinance would be 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

17 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



approximately $350,000. However, these costs will vary, 
depending on which new languages are determined to be 
covered by the proposed ordinance and what written 
materials City Departments are already providing in 
these languages. 

8. All City Departments would be required to fill vacant 
public contact positions with bilingual employees to 
provide information and services if the population 
receiving Department services meet either the 
"substantial number of limited English-speaking" or 
"concentrated number of limited English-speaking" 
criteria. Because this provision of the ordinance does not 
create new City positions, the City would not incur 
increased costs for new positions but would incur some 
increased costs by expanding the number of positions 
qualifying for bilingual pay. Currently, the Memoranda 
of Understanding (MOU) between the City and the City 
employee organizations provide for bilingual pay, ranging 
from $35 per pay period to $60 per pay period. The 
Budget Analyst notes that increased bilingual pay costs 
will vary, depending on when existing positions become 
vacant, and on which MOU covers the position. 

9. Under the proposed ordinance, all City Departments 
would be required to determine annually whether 5 
percent or more of those limited English-speaking persons 
who use the Department's services citywide speak a 
shared language other than English by either (a) 
conducting a 2-week survey of all contacts with the public 
made by the Department, or (b) analyzing information 
collected during the Department's intake process. 
Although City Departments will be required to allocate 
existing Department resources to conduct the proposed 
survey or information analysis, because of the time- 
limited nature of the survey or information analysis, the 
Budget Analyst does not find that this provision of the 
proposed ordinance will result in incremental costs. 

10. Additionally, the proposed ordinance requires City 
Departments to draft and file an annual compliance plan 
with the Immigrant Rights Commission, which includes 
(a) the number and percentage of limited English- 
speaking persons who use the Department's services, (b) a 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

18 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



list of the languages spoken by 5 percent of more of the 
residents of each Supervisorial District in which the 
Department's facilities are located, (c) the number of 
public contact positions in the Department and the 
number, title, office location and language of bilingual 
employees in these positions, and (d) other information as 
required to ensure compliance with the proposed 
ordinance. According DPH and DHS, these Departments 
are already required to report some of this information to 
State and Federal agencies and they are not anticipating 
that these requirements of the proposed ordinance will 
result in a request for additional funds. Although City 
Departments will be required to allocate existing 
resources to draft and file the compliance plan required by 
the proposed ordinance, the Budget Analyst does not find 
that this provision of the proposed ordinance will result in 
incremental costs. 

11. Currently, City Departments that translate written 
materials into languages other than English have their 
own contracts with outside translating services. To better 
coordinate translation services, ensure quality and 
conformity of translated materials in all City 
Departments, and achieve economies of scale, the Budget 
Analyst recommends that, if the subject ordinance is 
approved by the Board of Supervisors, the Department of 
Administrative Services (DAS) should be requested to 
coordinate translation services for City Departments, 
including the award of contracts to vendors to provide 
translation services for all City Departments. In addition, 
the Budget Analyst recommends that the DAS be directed 
to present to the Board of Supervisors a review of the 
costs of providing some translation services in-house, 
including an analysis of any cost savings that would 
result over contracting out these services and a proposal 
for recovery of full costs from City Departments. 

12. The proposed ordinance should be amended to delete 
reference to "Public Administrator/ Guardian" and to add 
"Department of Aging and Adult Services". 

13. In summary, approval of the proposed ordinance 
would result in new costs to the City as follows: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



$600,696 in new one-time costs for designated City 
Departments, called Tier 1 Departments, to translate 
written materials into Spanish and Chinese. 
$99,979 for the Immigrant Rights Commission to 
conduct outreach and facilitate implementation of the 
proposed ordinance, including $50,000 in grants to 
community-based organizations to conduct outreach 
and $49,979 for salary and fringe benefit costs for 0.67 
FTE Special Assistant 1365. 

City Departments other than the Tier 1 Departments 
would incur new one-time costs for translating all 
publicly-posted written materials regarding the 
Department's services and the rights of the 
Department's clients to receive services. The Budget 
Analyst is not able to provide an estimate of these 
increased costs at this time and recommends that the 
IRC work with City Departments to develop an 
implementation plan, including a determination of 
which documents would need to be translated. 
The Budget Analyst estimates that the City would 
incur approximately $350,000 in new one-time costs 
for translating written materials into each non- 
English language other than English and Chinese. 
City Departments would incur new costs for (a) 
printing translated materials in languages other than 
English, equal to approximately 5 percent more than 
printing such materials in English-only; (b) bilingual 
pay, ranging from $35 to $60 per pay period when 
existing vacant positions are filled with bilingual 
employees; and (c) translating new and revised written 
materials. Because City Departments do not yet know 
what increased costs they will incur, the Budget 
Analyst is not able to provide an estimate of these 
increased costs at this time. 



Recommendations: 1. Amend page 4, line 23, to delete "Public Administrator/ 

Guardian" and add "Department of Aging and Adult 
Services", as noted in Comment 12. 

2. Approval of the proposed ordinance as amended is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

20 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



3. If the proposed ordinance is approved, request the 
Immigrant Rights Commission (IRC) work with City 
Departments to develop an implementation plan for 
translating written materials under the proposed 
ordinance, which includes determining which documents 
need to be translated under this provision of the proposed 
ordinance, assisting the Departments with determining 
priorities, establishing a timeline for translating 
materials, and avoiding duplication of documents, as 
noted in Comment 4. 

4. If the proposed ordinance is approved, request DAS to 
coordinate translation services for City Departments and 
present a review of the costs of providing translation 
services in-house, as noted in Comment 11. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

21 



M/17/aai_ 15:48 4155544849 CITY ADMIN 

city admin Attachment page bi 



^52^ 



yi 




CITY AND COUNTY OF SAN FRANCISCO 
IMMIGRANT RIGHTS COMMISSION 



May 17, 2001 



Severin Campbell 

Budget Analyst's Office 

Fox Plaza 

1390 Market Street 

San Francisco, California 94102 

Dear Ms. Campbell: 

The proposed Equal Access to Services Ordinance would mandate the Immigrant Rights 
Commission (IRC) to: provide information to non-English-speaking immigrants 
regarding their rights to City services; and monitor the compliance of City agencies with 
the ordinance. 

The IRC estimates the cost for implementing this ordinance includes: 

a. $50,000 in grants to community based organizations 

b. $49,479 in salary and fringe benefits to increase an existing 0.33 FTE 
Special Assistant 1365 by 0.67 FTE, to create a full time position to monitor 
compliance. 

The IRC partnership with community-based organizations in the Census 2000 outreach 
effort yielded positive results for San Francisco. The commission's award of grants 
$10,00C - $50,000 to non-profit organizations of diverse ethnic constituencies contributed 
to a greater response rate. The IRC will be able to tap into the network established by the 
Census effort to assist in implementation of this proposed ordinance . 

Additionally, the Commission will work with City Departments during the first year of 
implementation of the ordinance to assist in determining which documents need to be 
translated to ensure the quality of translations and avoid duplication. 

For further information, please call me at 554-7583 or Winny Loi, Commission Secretary 
■at 554-4789. 

Sincerely. 



$&&.&>»* 



DangPhang-nL 
Executive Director 



City Hall, Room 362, 1 Dr. CaiW B. Goodlett Place, San Francisco CA 94102 
TEL (415) 554-4789; FAX (415) 554-6177 



22 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 3 - File 01-0681 



Department: 
Item: 



Lessor: 



Lessee: 



No. of Square Feet: 



Recreation and Park 

Resolution approving and authorizing the 
execution and delivery of a First Amendment to a 
Lease for the Beach Chalet allowing for the 
construction of a deck at the rear of the building. 

City and County of San Francisco acting through 
the Recreation and Park Department (RPD) 

Beach Chalet L.P., a restaurant, bar and 
microbrewery 

Under the existing lease, the Beach Chalet L.P. 
occupies 6,032 square feet of space on the second 
floor of the existing Beach Chalet building. The 
proposed First Amendment to the Beach Chalet 
lease would allow the Beach Chalet L.P. to build a 
3,100 square foot deck to expand the brewpub, 
bringing the total estimated square footage leased 
to the Beach Chalet L.P. to 9,132. Attachment I, 
provided by RPD, is a floor plan of the new 3,100 
square foot deck. Upon completion of the 
construction of the deck by the Beach Chalet L.P., 
the deck would become City property. 



Proposed Construction 
Under the Amended 
Lease: 



Under the proposed First Amendment to its 
existing lease, the Beach Chalet L.P. would be 
authorized to build a 3,100 square foot deck on the 
back side of the existing Beach Chalet building for 
an expanded food service area. Mr. Chris Mack of 
RPD reports that the Beach Chalet L.P. will select 
and be under contract with a contractor to design 
and build the Beach Chalet's new deck. To date, the 
contractor has not yet been selected by the Beach 
Chalet L.P. Mr. Mack reports that the RPD 
estimates a total construction and design budget of 
between $584,577 and $778,742 based on cost 
estimates submitted to RPD by the Beach Chalet 
L.P. (see Attachment II). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9^ 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Proposed Rent 

Credits: To offset the construction costs to the Beach Chalet 

L.P., the RPD, under the proposed First 
Amendment, would provide $218,750 in rent 
credits to cover approximately 28.1 to 37.4 percent 
of the estimated construction costs. Mr. Mack 
reports that such proposed rent credits were 
determined through negotiations in 1999 between 
the General Manager of RPD and the Beach Chalet 
L.P. 

Annual Rent Payable by 
the Beach Chalet L.P. to 
the City Under the 

Existing Lease: Under the existing lease for 6,032 square feet, the 

Beach Chalet L.P. pays to the City rent which is 
the greater of: 

i) $5,160 per month, or $61,920 per year, or 
ii) An amount equal to the total of the following 
percentages of the Beach Chalet's gross 
receipts 1 : (a) 6 percent of sales of food and 
non-alcoholic beverages, plus (b) 7.5 percent 
of alcoholic beverages, plus (c) 6 percent of 
the sales of retail goods, plus (d) 3 percent of 
all other gross receipts. 

According to Mr. Mack, the Beach Chalet L.P. paid 
to the City rent in the amount of $267,882 in 
calendar year (CY) 1997 ($317,882 less $50,000 in 
rent credit for the purchase and installation of a 
heating, ventilation and cooling system), $305,478 
in CY 1998, $300,776 in CY 1999 ($313,661 less 
$12,885 in a rent credit for the purchase of 
necessary supplies for restrooms), and $333,120 in 
CY 2000 ($334,441 less $1,321 in a rent credit for 
the purchase of necessary supplies for restrooms). 



1 Gross receipts include all amounts received and receivable from all sales and business 
transacted or services performed on the premises. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Proposed Annual Rent 
Payable by the Beach 
Chalet L.P. to the City 
Under the Amended 

Lease: Beginning the first day that the deck is open to the 

public for business, anticipated to be February 1, 
2002, rent would be the greater of: 

i) $6,000 per month, or $72,000 per year, or 
ii) An amount equal to the total of the following 
percentages of the Beach Chalet's gross 
receipts: (a) 6 percent of sales of food and 
nonalcoholic beverages, plus (b) 9 percent of 
sales of alcobolic beverages, until the 
proposed rent credit of $218,750 bas been 
exhausted, at which point the RPD is to 
receive 10 percent of sales of alcoholic 
beverages, plus (c) 6 percent of the sales of 
retail goods, plus (d) 4 percent of all other 
gross receipts 

The proposed First Amendment includes an 
increase in the percentage of gross receipts paid in 
rent from the selling of alcoholic beverages from 7.5 
percent under tbe existing lease to 9 percent, an 
increase of 1.5 percent, once the new deck is open to 
the public for business, anticipated to be February 
1, 2002. Mr. Mack advises that the percentage of 
gross receipts paid in rent from the selling of 
alcobolic beverages will increase from 9 percent to 
10 percent once the $218,750 rent credit has been 
exhausted, anticipated to occur in CY 2006. Tbe 
rent credit would be applied to the percentage rent 
in the amount of $55,000 annually during CY 2002, 
CY 2003, and CY 2004. The rent credit for CY 2005 
would be $53,750, for total rent credits of $218,750. 
According to Mr. Mack, the estimated rent to be 
paid by the Beach Chalet L.P. to the RPD in CY 
2002 is $445,866 (see Attachment III). 

Utilities and Janitorial 

Service: Provided by tenant. 

Term of Lease: 20-year lease that commenced June 19, 1995 and 

terminates June 18, 2015 (20 years) 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Description: 



Comments: 



The Beach Chalet is a two-story building located 
along the Great Highway in the western end of 
Golden Gate Park. The Beach Chalet was built in 
1925, and in 1980 the Federal Department of 
Interior gave the building national landmark 
status. From 1980 until 1995, the building stood 
vacant. 

According to Mr. Mack, the City entered into a 
lease on June 19, 1995 with the Beach Chalet L.P. 
for approximately 6,032 square feet of space on the 
second floor of the Beach Chalet building. Mr. Mack 
advises that the Board of Supervisors approved this 
lease in May of 1995. The term of the lease is for 20 
years, with two options to Beach Chalet L.P. to 
extend the initial term for two additional five-year 
terms, for a total of 10 additional years. The 
expiration of the existing 20-year lease is June 19, 
2015. 

1. Attachment III, provided by RPD, shows the 
anticipated increases in gross receipts and 
projected rent to be paid by the Beach Chalet L.P. 
to the City upon the opening of the new deck, 
anticipated to occur on February 1, 2002. In 
summary, this projection shows that the new deck 
could result in incremental percentage rent paid by 
the Beach Chalet L.P. to the City totaling $69,339 
during CY 2002, $74,002 during CY 2003, $78,839 
during CY 2004, and $85,108 during CY 2005. 
Beginning in CY 2006, when the rent credit is 
exhausted, RPD projects annual rent of $637,931 
resulting in incremental rent of $201,668, or 46 
percent more than the projected rent under the 
current lease of $436,263 anticipated in CY 2006 
without the new deck. 

2. According to Mr. Mack, construction of the new 
deck is anticipated to begin on September 26, 2001 
and to be completed on January 16, 2002. Mr. Mack 
reports that the Beach Chalet L.P. anticipates 
opening the deck to the public for business on 
February 1, 2002. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

3. Since the Beach Chalet L.P. is not the owner of 
the Beach Chalet building, the Beach Chalet L.P. 
was unable to secure property insurance for the 
building. Under the proposed First Amendment, 
the Beach Chalet L.P. would be required to 
reimburse the City 50 percent of the property 
insurance premiums previously paid by the City 
from December 27, 1996 through May 23, 2001, for 
a total of $11,792. According to Mr. Mack, 

• December 31, 1996 was the first day that the Beach 
Chalet L.P. began paying rent. Under the proposed 
First Amendment, the Beach Chalet L.P. would be 
required to reimburse the City for 50 percent of the 
property insurance premiums paid after such date. 
Once the deck is open for business, the Beach 
Chalet L.P. would pay 57 percent and the City- 
would pay 43 percent of all future annual insurance 
premiums and risk management fees. 

4. Since December 31, 1996, in accordance with 
the existing lease, the Beach Chalet L.P. has been 
required to pay for all water usage on the second 
floor of the Beach Chalet building and the City has 
been required to pay for all water usage on the first 
floor of the Beach Chalet building. However, to 
date, according to Mr. Mack, the Beach Chalet L.P. 
has paid for all of the building's water use since 
December 31, 1996. The proposed First 
Amendment requires that two water meters be 
installed by the City to determine the City's water 
usage on the first floor as well as the water usage 
on the second floor. These two water meters would 
enable the City and Beach Chalet L.P. to estimate 
the City's past water usage so that the City could 
reimburse the Beach Chalet L.P. for the City's 
share of past water usage. The estimated 
reimbursement to the Beach Chalet L.P. by the 
City for the City's share of past water usage from 
December 31, 1996 through May 23, 2001 is 
$60,000, according to Mr. Mack. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

97 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

5. In summary, the proposed First Amendment 
would: 

a) Allow for the construction of a 3,100 square 
foot deck on the back side of the Beach 
Chalet building for an expanded food service 
area; 

b) Authorize the City to provide a maximum of 
$218,750 in rent credits over a four year 
period to offset the cost of construction to the 
Beach Chalet L.P. for the new deck; 

c) Increase the minimum monthly rent from 
$5,160 to $6,000 once the construction of the 
new deck is complete; 

d) Increase the percentage of gross receipts 
paid in rent from the sales of alcoholic 
beverages from 7.5 percent under the 
existing lease to 9 percent once the 
construction of the new deck is complete and 
to 10 percent once the $218,750 in rent 
credits are exhausted, anticipated to occur in 
CY 2006; 

e) Increase the percentage of gross receipts 
paid in rent from all other gross receipts, 
such as candy and gumball machine revenue, 
from 3 percent to 4 percent once the 
construction of the new deck is complete; 

f) Require the Beach Chalet L.P. to reimburse 
the City for 50 percent of the property 
insurance premiums paid from December 27, 
1996 through May 23, 2001, for a total of 
$11,792; and 

g) Authorize the City to reimburse the Beach 
Chalet L.P. for the City's share of past water 
usage from December 31, 1996 through May 
23, 2001. 

Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

28 



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Memo to Finance Committee 

May 23 , 2001 Finance Committee Meeting 

Item 4 -File 01-0763 



Department: 
Item: 



Amount: 



Source of funds: 



Description: 



Budget 



Recreation and Park Department (RPD) 

Supplemental appropriation ordinance in the amount of 
$16,998,742 of the Golden Gate Park Bond Proceeds to 
fund the construction and renovation activities associated 
with the Martin Luther King (MLK) Drive Utilities 
Project, the North Lake Project and the Golden Gate Park 
East Entrance for the Department of Recreation and 
Park. 

$16,998,742 

Proceeds from the final Bond Sale of 1992 Golden Gate 
Park Improvements General Obligation Bonds on March 
7, 2001 (originally authorized by the Board of Supervisors 
in October of 2000 in File No. 00-1613). 

In June of 1992, the voters approved a $76,300,000 bond 
measure to finance . infr astructure improvements at 
Golden Gate Park. Since that time, such bond proceeds 
have accumulated an additional $7,606,844 in interest 
earnings for total funds available of $83,906,844. The 
bond proceeds have been used to finance irrigation system 
and fighting improvements, sewer line replacements and 
curb replacements. To date $59,401,201 in bond proceeds 
have been appropriated from the 1992 Golden Gate Park 
Bond funds. This additional appropriation of $16,998,742 
which would result in a total Golden Gate Park Bond 
appropriations of $76,399,943, would be allocated among 
three separate projects as shown on the table below. 

A summary table is shown below: 



Proposed Use of Funds 




Description 


Amount 


Martin Luther King Drive 
Utilities 


$12,770,493 


North Lake Renovations 


3,144,569 


Golden Gate Park East 
Entrance Improvements 


1,083,680 


Total 


$16,998,742 



Martin Luther King Drive Utilities : $12,770,493 for 
utility renovations along Martin Luther King Drive. The 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

32 



Memo to Finance Committee 

May 23 , 2001 Finance Committee Meeting 



project consists of a new irrigation system, extensive 
electrical work and the installation of new streetlights. 
The project will also include the construction of new curb 
ramps for compliance with American with Disabilities Act 
standards. A summary budget is shown below. 



Summary of Martin Luther King Drive Utilities Budget 


Expenditure Item 


Estimated Cost 


Mobilization, and Allowances 


$797,000 


Sewer Work 


616,260 


Mechanical work 


4,804,030 


Electrical Work 


2,644,586 


Landscape Work 


2,020,000 


Traffic Work 


222,900 


15% Contingency 


1.665.717 


Total 


$12,770,493 



North Lake Renovations : $3,144,569 for the renovation of 
North Lake in Golden Gate Park. The improvements 
include repair of the lake's lining, improved pedestrian 
paths and bridges and new plantings for habitat 
restoration as required by the State Fish and Game 
Department. A summary budget is shown below. 



Summary North Lake 




Expenditure Item 


Estimated Cost 


Mobilization and Set up 


$104,875 


Demolition and Excavation 


605,100 


Storm Drainage 


17,500 


Mechanical Systems 


161,000 


Lake bed work 


587,000 


Paving 


115,600 


Erosion Control 


90,000 


Accessibility Improvements 


79,368 


Lake Edge Access (High-Use Areas) 


63,956 


Site Rehabilitation Elements 


6,600 


Planting and Irrigation 


858,935 


Tree Removal 


93,000 


Environmental Protection Measures 


9,113 


15% Contingency 


418,807 


Subtotal 


$3,210,854 


Less: Funds previously approved by the 




Board of Supervisors 


(66.285) 


Total 


$3,144,569 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 23 , 2001 Finance Committee Meeting 



East Entrance to Golden Gate Park : $1,083,680 for 
improvements to traffic flow at the East Entrance to 
Golden Gate Park. The project includes improvements to 
pedestrian crossings, designated bike lanes and 
realigning of roadways to reduce driving speeds and 
irrigation improvements. A summary budget is shown 
below. 

East Entrance to Golden Gate Park 



Expenditure Item 


Estimated Cost 


Roadway work 


$371,830 


Sewer Work 


158,000 


Electrical Work 


121,000 


Landscape Work 


248,500 


Traffic Work 


43,000 


15% Contingency 


141.350 


Total 


$1,083,680 



Comment: 



Recommendation: 



1. As previously stated, the $76,300,000 Bond issuance 
has earned $7,606,844 of interest to date for a total 
available funding of $83,906,844. 

2. This supplemental appropriation of $16,998,742 would 
leave an unappropriated balance of $7,506,901 
($83,906,844 in total funds less $59,401,201 previously 
appropriated less $16,998,742 with the subject of this 
request). 

3. According to Ms. Shannon Maloney, of the Recreation 
and Park Department, the RPD will issue competitive 
bids for each of the proposed projects in June of 2001. 
Final contract awards would be made two months after 
the close of the bidding. 

Approve the proposed ordinance. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

34 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 5 - File 01-0667 

Note: This item was continued by the Finance Committee at its meeting of May 9, 
2001. 



Department: 
Item: 



Lessor: 
Lessee: 
Term of Lease: 



Effective Date of 
Lease Modification: 



Description: 



Airport 

Resolution approving Lease Modification Number 15 for 
Lease No. 82-0126 between United Air Lines, Inc. 
(United), and the City and County of San Francisco, 
acting by the through the Airport Commission. 

City and County of San Francisco 

United Airlines, Inc. 

July 1, 1981 through June 30, 2011, with no option to 
renew. 



June 1, 2001 or upon occupancy of said areas if the Board 
of Supervisors has approved the lease and occupancy 
occurs prior to June 1, 2001. 

Under Lease and Use Agreement No. 82-0126 
(Agreement) dated July 1, 1981, by and between the City 
and County of San Francisco and United Air Lines, Inc., 
as previously amended and approved by the Board of 
Supervisors, United leases from the Airport 
approximately 442,444 square feet of exclusive use space 
in the North Terminal of the San Francisco International 
Airport. The Agreement was last amended and approved 
by the Board of Supervisors in November of 1999 (File 99- 
1852) for the purpose of relocating United's international 
flights to the new International Terminal and the 
completion of United's new automated baggage system. 

According to Ms. Dorothy Schimke of the Airport, over the 
past approximately 8 years, air passenger traffic in the 
North Terminal had increased so significantly it had 
severely strained the existing concession and airline 
operations space. Therefore, in 1998 the Airport 
undertook a program to expand Boarding Area "F' of the 
North Terminal, adding approximately 49,973 square feet 
of airline operations space under the lease with United 
(see Attachment I, provided by the Airport). 



35 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



The purpose of the proposed Lease Modification No. 15 is 
(1) to account for the increase of approximately 49,973 
square feet of exclusive use space in the North Terminal 
used by United Airlines for the expansion of Boarding 
Area "F'; and, (2) the decrease of approximately 462 
square feet of United's exclusive use space from the 
International Terminal, which had been erroneously 
included by the Airport in Modification No. 14, previously 
approved by the Board of Supervisors, as both United's 
exclusive use space and as joint use space (see Comment 
4). Joint use space is defined as airline rental space in a 
facility owned by the Airport which is leased to more than 
one airline for the shared use of all airlines sharing that 
space. Ms. Schimke advises that the subject 

approximately 462 square feet is correctly included in the 
International Terminal as joint use space because the 
space is leased to more than one airline for shared use 
whereas all applicable airlines pay their share of the rent 
for that space. 

Comments: 1. According to Ms. Schimke, the increase of 

approximately 49,973 square feet of exclusive use space in 
the North Terminal for United would result in the 
increase of annual rental to the Airport of $5,013,433, as 
shown in the table below, based on the rental rates in 
effect from February 1, 2001. Ms. Schimke advises that 
this increase represents a 15% increase in United's rent 
for the North Terminal. Ms. Schimke states that rental 
rates are based on the Airport's Rates and Charges for 
Airlines, which are adjusted each July 1 by the Airport 
using the rates and charges methodology prescribed in 
the Lease and Use Agreements, as previously approved by 
the Board of Supervisors, and contained in Attachment II, 
provided by the Airport. Ms. Schimke notes that the 
rental rates in effect from July 1, 2000 were updated on 
February 1, 2001 due to a revenue shortfall primarily 
from the delayed opening of the International Terminal. 

2. According to Ms. Schimke, Modification No. 15 of the 
subject Agreement adds space to United's North Terminal 
leasehold following the completion of the expansion of 
Boarding Area "F' in the following categories: 



36 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Category 
I 

II 



III 



IV 



V 



Description 

Gate Holdroom Space 

New Red Carpet Club and Mezzanine Offices 
located above the flight departure level. 

Enclosed Space located below the flight 
departure level. 

Miscellaneous Mechanical Space 

Unenclosed Storage 



The approximately 49,973 square feet will be added under 
the United lease in the following five categories of space: 



North Terminal Building 




Annual Rent 










Total 






per Sq Ft by 




Current 


Proposed Sq 


Annual Rent 


Proposed 


Anticipated 


Category 


Category 


Current Sq Ft 


Annual Rent 


Ft Increase 


Increase 


SqFt 


Annual Rent 


1 ' 


$ 154.78 


62,572 


$ 9,684,894 


552 


$ 85,439 


63,124 


$ 9,770,333 


II 


116.09 


85,703 


9,949,261 


35,242 


4,091 ,244 


120,945 


14,040,505 


III 


77.40 


65,613 


5,078,446 


9,484 


734,062 


75,097 


5,812,508 


IV 


38.69 


211,191 


8,170,980 


1,293 


50,026 


212,484 


8,221,006 


V 


15.48 


17,365 


268,810 


3,402 


52,663 


20,767 


321,473 


Total 




442,444 


S 33,152,392 


49,973 


S 5,013,433 


492,417 


538,165,825 



3. Ms. Schimke advises that the building expansion of 
Boarding Area "F', including the subject 49,973 square 
feet of space for United, was substantially completed in 
November of 2000. United is currently constructing its 
tenant improvements in the North Terminal, which are 
expected to be completed by late Summer of 2001. 
Therefore, United has not yet begun to occupy the subject 
49,973 additional square feet. According to Ms. Schimke, 
the proposed Modification No. 15 will become effective on 
June 1, 2001 or upon United's occupancy of the subject 
additional 49,973 square feet, whichever is earlier, in 
accordance with the latest established rates as of 
February 1, 2001. 

4. Ms. Schimke states that Modification No. 14, 
previously approved by the Board of Supervisors, 
erroneously included approximately 462 square feet of 
exclusive use Category III or Enclosed space in the 
International Terminal. Ms. Schimke advises that the 
inclusion of the subject approximately 462 square feet of 



37 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



exclusive use Category III space for United was an 
administrative error. According to Ms. Schimke the 
approximately 462 square feet of space is properly defined 
as joint use space in the International Terminal and not 
as exclusive use space. Ms. Schimke advises that all 
rental rates are the same whether classified as exclusive 
use space or joint use space. Regarding this 462 square 
feet in the International Terminal which, according to Ms. 
Schimke, United was erroneously charged twice by the 
Airport, as both exclusive use space and joint use space, 
the Airport will still receive, on an annual basis, $35,759 
for the subject approximately 462 square feet under joint 
use space, of which United will pay its proportionate 
share of the rent. The Airport proposes to refund the 
portion of the rent paid twice by United. This refund is 
estimated to be $15,506 for the exclusive use space for the 
period from December 10, 2000, when United took joint 
use occupancy of the subject square footage until approval 
of this legislation by the Board of Supervisors and the 
Mayor. June 1, 2001 was used as the basis for the 
calculation of the $15,506 based on the estimated date of 
final approval of this resolution. If approval of this 
renovation is finalized prior to June 1, 2001 then United 
would be refunded less than $15,506. 

5. Given the reduction in the annual revenues of $35,759 
for the approximately 462 square feet of exclusive use 
Category III space in the International Terminal that 
United was being charged by the Airport and the increase 
in annual revenue to be paid by United for the additional 
49,973 square feet of exclusive use space of $5,013,433 
from the expansion of Boarding Area "F' in the North 
Terminal, tbe total net annual increase in rent revenues 
payable by United to the Airport is estimated to be 
$4,977,674 ($5,013,433 less $35,759). Ms. Schimke 
advises that the rental rates beginning in July 1, 2001 are 
anticipated to be higher than the rates currently being 
charged. 

6. The proposed resolution does not include language for 
the deletion of approximately 462 square feet exclusive 
use space in the International Terminal which had been 
charged to United. 



38 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

7. Based on the inquires of the Finance Committee at its 
meeting of May 2, 2001, Mr. John Martin, Airport 
Director, provided a memorandum (Attachment III) 
pertaining to the Airport's policy of initiating rental 
charges at the time of beneficial occupancy. 

8. The Finance Committee, at its meeting of May 9, 2001, 
requested the Airport to ask United if they would pay rent 
for the subject 49,973 square feet when United began its 
tenant improvements, rather than the proposed effective 
June 1, 2001 date for this Lease Modification. According 
to Ms. Cathy Widener of the Airport, as of the writing of 
this report, the Airport is still in negotiations with United 
as to what date that the Airport should begin charging 
United rent for the subject increased 49,973 square feet of 
space. 

Recommendations: 1. Amend line fifteen of the proposed resolution to 

account for the deletion of approximately 462 square feet 
of exclusive use space in the International Terminal by 
adding, "and deletion of approximately 462 square feet of 
the International Terminal as exclusive use space," in 
accordance with Comment 6 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors. 



39 



FROM- SFIA DEPT. OF AVIATION MGMT. (650)821 4535 (FRI) 4 



QX!™ 



20' 01 



Attachment I 



BOARDING AREA F 
HUB AND THUMB 



EXPANSION AREAS 




Attachment II 
Page 1 of 2 




M SFIA DEPT. OF AVIATION MGMT. (650)321 4535. (WED) 4. 25' 01 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 
CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: Budget Analyst DATE: April 24, 2001 

FROM: Dorothy Schimke 

Airport Rates and Charges 

Background 

In 1979 a number of airlines filed suit to litigate certain complaints against the City, 
including an allegation that Airport revenues were being unlawfully diverted to the City's 
General Fund. (Federal law prohibits the expenditure of airport revenues for non-airport 
purposes.) hi early 1980 the City and the airlines that were parties to the suit entered into 
settlement negotiations that resulted in a detailed Settlement Agreement and an Airline- 
Airport Lease and Use Agreement ("the LU")- Provisions for a substantial restructuring 
of the financial operation of the Airport, including the methodology for calculating 
Airport Rates and Charges, were incorporated into the LU as part of the Settlement 
Agreement. 

Calculation of Rates and Charges 

In general, the airlines are obligated to pay terminal building rental rates and landing fees 
in amounts that, when included with all other Airport revenues, will be sufficient to cover 
all annual Airport costs. Rates are adjusted annually. Terminal rate adjustments are 
based en the average cost per square foot of providing, maintaining and operating the 
terminal building areas. 

A simplified outline of the methodology for calculating Airport terminal rents is as 
follows: 

1. Expense Forecasting. Airport forecasts its expenses, including both operating and 
capital expenses, for the upcoming fiscal year. 



41 



'. .'. - . > .. Attachment II 

F&OiTSFIA DEPT.O? AVIATION MGMT. (650)821 4535 (WED) 4. 25' 01 .. Page . } . of 2 

Budge Analyst 
April 24. 2001 
Page 2 



2. Revenue Forecasting. Airport forecasts its non-airline terminal revenues for the 
upcoming fiscal year. 

• Concession revenues 

• Rents from non-airline tenants 

■ Other revenues (e.g., interest on unexpended capital funds) 

1 . Annual Service Payment. 15% of Concession revenues goes to City's general fund 
as compensation for indirect services to the Airport. 

2. Calculation. 

• Non-airline revenues (net of Annual Service Payment) are set off against 
projected expenses. 

• Remainder (expenses that are not covered by non-airline revenues) is divided by 
the total square feet of terminal space rented by airlines to determine average rent 
per square foot, which is then apportioned into five rate categories. 

• The higher the number of square feet rented to airlines, the lower the effective 
rental rate required to recover the terminal costs. 



42 



F-RGM SFO INTERNATIONAL AVIATION DEVELOPMENT (THUj 5. 3' 01 mm 



Attachment III 



AiirsiT 

ffTr AKDCOV.'JfY 

Of s*« manciht. 

Willi* '. »»ewN.jR. 

Mlf H*U i JTPU><S»! V 
lIHUA * tUAVTn.T 

r>m no 



IDHKI M4H.TIS 




San FranciiCO International AYport 

May 3, 2001 



P.O. Box 8097 

San Francisco. CA 9413$ 

Tri 45C.8ci.50ou 

F a<u50.E2l.?on3 

WW\,V.flyrfc.COm 



Honorable Mark Leno 

Chair, Finance Commtaw 

Board of Supervisors 

Gey and County of San Frandsco 

1 Dr. Carkon B. Goocflett Place 

Chy Hafl, Room 244 

San Frandsco, CA 94102-4689 • 

Dear Supervisor Lena: 

Jn^r^l?^ 1 ^ ** *** **** * S^^w P«kln about the Airporf* poflcv of 
initiating rental charges at the time of benefldal occupancy. rerporrs poncy of 

S^^S*? know J thaI *« A'W Commission has a longstanding poncy of orovidim, a 
"Ievd playing field- for all busine* tenants In our ^mffi^ 

use Agreement m 1981, no tenant, be It airline or concession hx b»m ^ *ZT^ 1Z 
operadonoftheirbusiness. TT^«an<iard at a^ 

All leases at the Airport contain a dau* that stipulates that when a tea*. r*m>in^~ .*, 
^>v^n^bythetena*ar^ 

Gty and County of San Francfcco. The Cbmn**>n beUeveTm^ Tls^S^! 
prao.ce »« ^le charge" the tenant as he or srTSSs^,^ ££?£ 
^ourWgh standards of terar« Irnpiovemeni. Whh respect Aele^Son! 
hehg considered by the Finance Commtaee, United AMim? wffl^eToveTfnS 
delicto improve the space. These Improvements wfll belong to theQw ^TiJnt^f 
San Francisco at the terrnfciatbn of the lease to 2011. ""* ° f 

Jh^flP ^ A ?!f S for "»«*"**** conaructlon period wffl result in a policvof 
^gtr* all tenants during future construction period,. I have a concern t£t thYcLd 

^IZ "? !^! aVOr "> *™ **« International carriers aTdi^ SS 
cor<esiortan^frombIddlr«onfutuj«rer^leas« ^ flnaU 

Thank you for your consideration. I stand ready to dkcu* xhis matter with you further. 



Very 




ours, 



JohnX Martin 
Director 



cc: Members, Finance Cornmittee 



43 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 6 - Files 01-0822 



Department: 
Item: 



Lessor: 

Lessee: 

Term of 
Original Lease: 



Effective Date of 
Lease Modification: 



Amount Payable 
to Airport: 

Description: 



Airport 

Resolution approving the first lease modification of the 
Glide Slope Lease, between the U.S. Federal Aviation 
Administration (FAA) and the City and County of San 
Francisco, acting by and through the Airport Commission, 
to increase the FAA's leasehold from 0.28 acres to 0.74 
acres and allow for the installation, operation and 
maintenance of a third piece of Glide Slope equipment. 

City and County of San Francisco 

Federal Aviation Administration (FAA) 



October 1, 1986 through September 30, 2006, with no 
option to renew. 



According to Mr. Robert Rhoades of the Airport, the lease 
modification will become effective subsequent to approval 
of this proposed resolution by the Board of Supervisors. 



No charge to the FAA (see Comment 1) 

This subject lease agreement currently provides the FAA 
with approximately 0.28 acres of space for the 
installation, operation, and maintenance of Glide Slope 
equipment on the site identified in the Attachment, 
provided by the Airport, as Glide Slope Site, Parcel No. 
5 A at the Airport for Runway 28L. According to Mr. 
Rhoades, Glide Slope equipment is radar equipment that 
allows Air Traffic Controllers to guide airplanes onto 
runways simultaneously during inclement weather 
conditions, such as low ceiling. Mr. Rhoades advises that 
such equipment will improve the operational efficiency 
and safety of Airport landings during inclement weather. 

The proposed resolution would approve a lease 
modification between the Airport and the FAA in order for 
the FAA to (a) increase the leasehold by 0.46 acres, from 
0.28 acres to 0.74 acres; and, (b) install, operate, and 

Board of Supervisors 
Budget Analyst 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

maintain a third piece of Glide Slope equipment for 
Runway 28L at the Airport. 

Comments: 1. According to Mr. Rhoades, Section 6.7 of the Air Traffic 

Control Lease (DOT-FA76WE-3702-A), states, 

"Whenever so requested the Airport Operator shall 
furnish without cost to the Federal Government, for 
construction, operation and maintenance at Federal 
expense, of facilities for air traffic control activities or 
weather reporting activities and communication 
activities related to air traffic control, such areas of 
land or water, or estate therein, or rights in buildings 
of the Airport Operator as the FAA may consider 
necessary or desirable for construction, operation and 
maintenance of facilities and activities. The 
approximate amounts of areas and the nature of the 
property interests and/or rights so required will be set 
forth by a separate lease." 

Mr. Rhoades adds that the subject lease for Glide Slope 
equipment is a separate lease related to air traffic control 
and safety. Therefore, there is no rent charged to the 
FAA for use of the land for the Glide Slope equipment. 

2. According to Mr. Rhoades, the additional 0.46 acres, for 
a total of 0.74 acres, are needed for the installation, 
operation and maintenance of a third piece of Glide Slope 
equipment for Runway 28L. Mr. Rhoades advises that 
the amount of space is determined based on the size of the 
Glide Slope equipment. Additionally, Mr. Rhoades states 
that the subject space cannot be practically used for any 
purpose other than aircraft safety provisions. 

3. Mr. Rhoades advises that the FAA would install, 
operate and maintain the Glide Slope equipment at its 
own expense and at no cost to the Airport. 

Recommendation: Approve the proposed resolution. 



Board of Supervisors 
Budget Analyst 
45 



•A-ffa-cHtQeraC 



i i' .t ■'■• ■■■ :«::?• ' 




46 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 7 - File 01-0699 



Department: 
Item: 

Comment: 



Recommendation: 



Fire Department 

Treasure Island Development Authority- 
Resolution approving a sublease between tbe City and the 
Treasure Island Development Authority for the Fire 
Fighting Training Center located on Treasure Island, at 
an annual rent of $1,740,000. 

As of the writing of this report, the Fire Department has 
not provided information requested by the Budget Analyst 
to prepare a full report on this item. The Budget Analyst 
therefore recommends that the proposed resolution be 
continued for one week. 

Continue the proposed resolution until the Finance 
Committee meeting of May 30, 2001. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

47 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 8 - File 01-0549 

Note: This item was continued by the Finance Committee at its meeting of May 
16, 2001 (See Comment 3). 



Department: 
Item: 

Amount: 
Source of funds: 



Description: 



Fire Department 

Supplemental Appropriation for the Overtime costs of uniform 
Firefighters and Investigators in the Fire Department. 

$2,991,267 

General Fund Reserve $1,626,267 

Increased Fire Inspection Services Revenue 505,000 

Increased Fire Plan Checking Revenue 360,000 

Increased Paramedic Services Revenue 500,000 

Total Sources $2,991,267 

The proposed supplemental appropriation is comprised of the 
following Overtime: 



Fire Suppression Overtime 
Fire Prevention Overtime 
Total 



$2,486,267 

505.000 

$2,991,267 



According to a March 15, 2001 letter submitted by Acting Chief 
of the Fire Department Paul Tabacco, the combined effect of 
a) Firefighter retirements, which generally occur early each 
fiscal year, and b) absenteeism resulting from Firefighter use 
of vacation time, compensatory time, sick leave and disability 
leave, reduces daily staffing to levels that are not sufficient to 
"meet the minimum daily requirement of 352 Firefighters for 
Fire Suppression, including Emergency Medical Services 
personnel. Hence, the Department frequently meets its 
minimum daily staffing policy of 352 Firefighters by 
backfilling vacant positions and absences with Firefighters on 
overtime status, who are paid at time and one half rates. 

Based on data submitted to the Budget Analyst, the Fire 
Department employed, on average, 34.6 Firefighters on 
overtime per day for the six month period of July of 2000 
through December of 2000. During that time, the Department 
was also hiring and training new Firefighters. Chief Tabacco 
reports the following new hires since July of 2000: 

• 36 H2 Firefighters were hired and trained and were 
assigned to Fire suppression duty in August of 2000; 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

48 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



• 48 H2 Firefighters were hired and trained and were 
assigned to Fire suppression duty in November of 2000; 

• 47 H3 Firefighter Paramedics were assigned to Emergency 
Medical Services duty in January of 2001; and, 

• 23 H2 Firefighters graduated from training recently, on 
March 16, 2001 and have been assigned to Fire suppression 
duty. 

As a result of hiring and training a total of 154 new 
Firefighters and Firefighter Paramedics this Fiscal Year as 
outlined above, the number of Firefighters on Overtime to 
meet the department's Minimum Daily Staffing policy of 352 
Firefighters for Fire Suppression, including Emergency 
Medical Services, has decreased from the average of 34.6 per 
day for the first six months of FY 2000-2001 to approximately 
6 per day for the period of January through April of 2001. 

In addition to the Overtime needs for Fire suppression, 
discussed above, Chief Tabacco reports that continued high 
demand for Fire Inspection services by developers and 
contractors has resulted in increased Fire Prevention Overtime 
spending for such services as the Fire Department is often 
asked to expedite construction inspection services and conduct 
certain inspection services such as alarm testing before or 
after normal work hours and on weekends. 

Because of the need for high rates of spending for Overtime 
discussed above, the Fire Department has requested additional 
Overtime funding for a) Fire Suppression Services in the 
amount of $2,486,267 and b) Fire Prevention Services in the 
amount of $505,000, for a total supplemental appropriation of 
$2,991,267. 

The Fire Department has also realized increased departmental 
revenue in the amount of $505,000 for Fire Inspection Services 
Revenue, $360,000 for Fire Plan Checking Revenue and 
$500,000 for Paramedic Services Revenue, for total additional 
revenues of $1,365,000, to fund this supplemental 
appropriation request, together with $1,626,267 from the 
General Fund Reserve resulting in a total request of 
$2,991,267. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

49 






Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

The proposed supplemental appropriation in the amount of 
$2,991,267 was based on a projection submitted to the Mayor 
that used actual expenditures through the pay period ending 
February 16, 2001. The projection for Fire Department 
Overtime spending and all Salaries and Fringe Benefit costs, 
including Overtime is shown below. 

Fire Department Projection of General Fund Expenditures for Overtime and 

total Salaries and Fringe Benefits based on Actual Expenditures through 

February 16, 2001 and Fire Department Spending Plan 

Actual 
Expenditures Projected 

Through Pay Expenditures Projected Surplus 
FY 2000-2001 Period Ending Through July 30, (Deficit) 
Budget 2/16/2001 2001 

Overtime 57,382,801 $9,034,823 $11,286,347 ($3,903,546) 

All Salaries and Fringe $160,720,343* $106,474,054 $163,711,610 ($2,991,267) 

Benefits Including Overtime 

* The Fire Department budget figure shown above for all salaries and benefits of $160,720,343 
was $83,214 less than the correct amount of $160,803,557. 

As shown in the table above: 

• Fire Department Overtime spending through February 16, 
2001 of $9,034,823 already exceeded the Overtime budget 
amount for the entire fiscal year of $7,382,801 by 
$1,652,022 or 22.4 percent. 

• Projected Overtime spending for all of FY 2000-2001 of 
$11,286,347 would exceed the Overtime budget amount for 
the entire fiscal year of $7,382,801 by $3,903,546 or 52.9 
percent. 

• For all General Fund Salaries and Benefits, including 
Overtime, the Fire Department spending plan projected 
total spending of $163,711,610 which is $2,991,267 or 1.9 
percent more than the budget amount for such 
expenditures of $160,803,557. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

50 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



During FY 2000-2001, the Budget Analyst has monitored 
overtime spending and Firefighter absenteeism data in 
conjunction with the performance audit and the Zero Base 
Budget Analysis of the Fire Department directed by the Board 
of Supervisors. 

Based on payroll expenditures incurred since the proposed 
supplemental appropriation was submitted to the Mayor on 
March 15, 2001, Fire Department Overtime spending has 
continued to decline. As noted above, Fire Suppression staffing 
has increased as new personnel have been assigned to sworn 
duty, and the number of Firefighters assigned on Overtime to 
meet the department's Minimum Daily Staffing policy of 352 
has consequently decreased. While Overtime spending 
averaged $609,805 per pay period during the first six months 
of FY 2000-2001, average Overtime spending fell to $133,029 
per pay period during the month of March, 2001. 

Comments: 1. The Budget Analyst has reviewed the Fire Department's 

spending plan projections which concludes that the amount 
needed for the proposed supplemental appropriation is 
$2,991,267. The Budget Analyst's review concluded that the 
Fire Department's projected Overtime spending was at a 
higher rate for the remainder of FY 2000-2001 in comparison 
to its most recent actual overtime expenditures. The Budget 
Analyst then reviewed the spending plan with the Fire 
Department, to update the spending plan to include 
expenditure data from subsequent pay periods and reduce the 
assumed levels of spending for Overtime during the remainder 
of the fiscal year to reflect recent trends. 

Based on this further analysis, the Budget Analyst 
recommends that the proposed supplemental appropriation 
can be reduced by $830,791, from the request of $2,991,267 to 
a new total of $2,160,476. The Fire Department agrees with 
the recommendation of the Budget Analyst, which would 
reduce the required funding from the General Fund Reserve 
from $1,626,267 to $795,476. 

2. During the performance of the Budget Analyst's Zero 
Base Budget Review, the Budget Analyst has learned from 
Fire Department management that more Firefighter personnel 
have been assigned to the San Francisco Airport than the 
amount of funds budgeted. Up to as many as 20 Firefighters 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

51 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

have been assigned to the Airport whom the Airport has not 
funded during the last two fiscal years. The Fire Department 
and the Mayor's Office are working with Airport staff to 
account for the funds owed to the General Fund by the Airport 
for the increased costs of Airport fire protection. The amount of 
funds owed by the Airport to the General Fund for FY 1999- 
2000 and FY 2000-2001 is estimated to be $1,500,000 
according to Ms. Christine Ragan, Chief Financial Officer of 
the Fire Department. Should the Airport reimburse the 
General Fund by the estimated amount of $1,500,000, such 
funds would eliminate the need to provide any monies from the 
General Fund Reserve, including the reduced amount of 
$795,476 as recommended by the Budget Analyst. In addition, 
receipt of such funds from the Airport would increase the 
General Fund FY 2000-2001 yearend surplus by approximately 
$704,524 ($1,500,000 less $795,476). 

3. On May 16, 2001 the Finance Committee accepted the 
Budget Analyst recommendations as outlined below. However, 
as of the writing of this report, the Budget Analyst has 
received no new information concerning the resolution of the 
amount owed by the Airport to the General Fund. The Budget 
Analyst therefore recommends that the proposed supplemental 
appropriation again be continued until this matter is resolved. 

Recommendations: 1. Reduce the proposed supplemental appropriation by 

$830,791 from $2,991,267 to $2,160,476 as follows: 

• Amend page one, line eight of the supplemental 
appropriation to reduce the amount of funding from the 
General Fund Reserve by $830,791 from $1,626,267 to 
$795,476. 

• Amend page one line 22 of the supplemental appropriation 
to reduce the expenditure amount for Suppression 
Overtime - Uniform by $830,791 from $2,486,267 to 
$1,655,476. 

2. Continue the proposed supplemental appropriation, as 
amended, to the call of the Chair pending resolution of the 
amount owed by the Airport to the General Fund as noted in 
Comment 3 above. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

52 



Memo to Finance and Labor Committee 

May 23, 2001 Finance and Labor Committee Meeting 

Item 9 - File 00-0825 
Department: Police (SFPD) 



Item: 



Amount: 



Hearing to consider the release of reserved funds for the Police 
Department in the amount of $1,700,195 in Uniform Salaries. 

$1,700,195 



Source of Funds: Reserved funds in the Police Department's FY 2000-2001 
General Fund Budget 

Description: During the Finance and Labor Committee's hearings on the 

proposed FY 2000-2001 budget in June of 2000, the Finance and 
Labor Committee reserved $1,700,195 in the Uniform Salaries 
account "pending a plan for the hiring and training of additional 
Police Officers to bring the Department's staffing up to 1,971 full 
duty Police Officers as required by Charter Section 4.12 7". The 
SFPD's FY 2000-2001 budget proposed hiring 200 new Police 
Officers. 

The table below provides a projection of the Police Department's 
Overtime expenditures and total Salary and Benefits 
expenditures (including Overtime) for the remainder of Fiscal 
Year 2000-2001. This projection is based on all funds 
appropriated for Salaries and Fringe Benefits, including the 
reserved funds of $1,700,195. 



Projection of Police Department General Fund Expenditures for Overtime and 
total Salaries and Fringe Benefits based on Expenditures through 

May 11, 2001 



FY 2000-2001 
Budget 



Actual 

Expenditures 

Through Pay 

Period Ending 

4/27/2001 



Projected 
Expenditures Projected Surplus 
Through July 30, (Deficit) 

2001 * 



Overtime 



$ 12,852,705 
196,974,614** 



$ 14,456,222 
163,191,882 



$ 17,066,402 
196,329,592 



$ (4,213,697) 
645,022 



All Salaries and Fringe 
Benefits Including 
Overtime 

* Projection based on actual spending through April 27, 2001 and projected spending for 

the remainder of the Fiscal Year. 

** Total salaries and fringe benefits budget amount includes all funds appropriated 

including the reserved amount of $1,700,195. 

Board of Supervisors 
Budget Analyst 
. 53 



Memo to Finance and Labor Committee 

May 23, 2001 Finance and Labor Committee Meeting 



As shown in the table on the previous page, the proposed release 
of $1,700,195 in reserved funds would result in a projected year- 
end surplus of $645,022 as follows for all Salaries and Fringe 
Benefits, including Overtime, despite the projected overtime 
deficit of $4,213,697: 





Surplus 


Account 


(Deficit) 


Permanent Salaries 


$3,098,742 


Temporary Salaries, Premium and 




Holiday Pay 


173,854 


Mandatory Fringe Benefits 


1,362,146 


Overtime 


(4,213,697) 


Adjustments from other, non-General 




Fund sources 


223.977 




$645,022 



As shown in the table above, the $4,213,697 Overtime deficit is 
largely offset by large surpluses in Permanent Salaries in the 
amount of $3,098,742 and Mandatory Fringe Benefits in the 
amount of $1,362, 146. 

Comments: 1. During the review of the proposed FY 2000-2001 SFPD 

budget in June of 2000, the Budget Analyst reported to the 
Board of Supervisors that the Police Department's recommended 
appropriation for Overtime expenditures appeared to be 
underbudgeted by $2,250,000 compared to FY 1999-2000 Police 
Overtime spending levels at that time. In fact, the SFPD is now 
estimating that Overtime expenditures have been 
underbudgeted by $4,213,697. 

Also, in June of 2000, the Budget Analyst recommended total 
reductions to the SFPD proposed FY 2000-2001 budget of 
$1,645,025, which included reductions of $1,338,525 for Uniform 
Salaries and related Mandatory Fringe Benefits. At that time, 
the Budget Analyst noted that the reductions of $1,338,525 to 
the SFPD proposed budget for Uniform Salaries and related 
Mandatory Fringe Benefits would not impair the SFPD's ability 
to fund its planned hiring of 200 new Police Officers during FY 
2000-2001. The Finance Committee did not accept the 
recommendation to reduce Uniform Salaries and related 
Mandatory Fringe Benefits by $1,333,525, and instead 
established the subject reserve of $1,700,195. 

Board of Supervisors 
Budget Analyst 

54 



Memo to Finance and Labor Committee 

May 23, 2001 Finance and Labor Committee Meeting 



2. Tbe SFPD began FY 2000-2001 with 2,077 Police Officers 
(excluding the Airport Police). Since that time, the Department's 
sworn staffing has changed as shown in the table below: 

Changes to Police Sworn Staffing Since July 1, 2000 
(Excluding Airport Police) 

Sworn Staffing on July 1, 2000 2,077 

New Hires 

Academy Class Started 9/18/2000 44 

Academy Class Started January 8, 2001 46 

Academy Class Started April 16, 2001 45 

Lateral Transfer Class Started April 23, 2001 _1_ 

Total Hires 142 

Attrition : 

Service or Disability Retirement (63) 

Resignations (40) 

Released/discharged from probationary status (7) 

Deaths £2} 

Total Attrition (112) 

Sworn Staffing as of January 8, 2001 2,107 

In addition to the current sworn staffing of 2,107, the SFPD 
intends to hire 45 new recruits who will begin the Police 
Academy on June 25, 2001. Therefore, new hires for FY 2000- 
2001 will total 187 (142 hired to date and 45 to be hired as of 
June 25, 2001) and total sworn staffing will increase to 2,152 
(2,107 current sworn staff plus 45 new hires). The Police 
Department will therefore not meet its goal to hire 200 new 
Police Officers. The SFPD has not met this goal of hiring 200 
new Police Officers this fiscal year, primarily because the 
number of Lateral Transfers to the Department were lower than 
expected, according to Captain John Goldberg, head of the Police 
Department's Fiscal Division. The Police Department originally 
estimated hiring of 25 Officers as Lateral Transfers, recruited 
from other Police jurisdictions, but were finally able to recruit 
only seven. If the 25 Lateral Transfers had been successfully 
recruited, new hires would total 205 in FY 2000-2001 instead of 
187 new hires that was attained. 



Board of Supervisors 
Budget Analyst 
55 



Memo to Finance and Labor Committee 

May 23, 2001 Finance and Labor Committee Meeting 



3. In summary therefore, the Police Department will Have hired 
187 new Police Officers during FY 2000-2001, or 13 less than the 
planned hiring of 200, while realizing savings in Permanent 
Salaries of $3,098,742 and Mandatory Fringe Benefits of 
$1,362,146 that will total $4,460,888. These surplus Salaries 
and Mandatory Fringe Benefits are largely offset by deficit 
Overtime spending of $4,213,697. Overall, as noted above, the 
Police Department is projecting a surplus in Salaries and 
Mandatory Fringe Benefits, including Overtime, of $645,022. 
The Budget Analyst has reviewed this projection and agrees 
with the projected $645,022 surplus. 

4. Captain Goldberg also reports that the Department of 
Human Resources currently estimates that the Police 
Department's Workers' Compensation budget has a projected 
deficit of approximately $700,000 for FY 2000-2001, and that the 
$645,022 surplus will be needed, along with anticipated 
surpluses in other, non-salary accounts, to offset the projected 
deficit. The Budget Analyst has reviewed the projected Workers' 
Compensation deficit of $700,000 and agrees with the SFPD 
projected deficit for Workers Compensation based on Workers 
Compensation expenditures through the first nine months of the 
fiscal year. 

5. Because of the projected $645,022 surplus in Salaries and 
Fringe Benefits, including Overtime, the Budget Analyst 
recommends that the Finance Committee reduce this subject 
request of $1,700,195 by $645,022 to $1,055,173 and therefore 
approve the release of reserved funds in the amount of 
$1,055,173 ($1,700,195 less $645,022). The Budget Analyst 
further recommends that the Finance Committee direct the 
Controller to use such remaining reserved funds in the amount 
of $645,022 only to offset other Police Department non-salary 
deficits, including Workers Compensation, at the close of FY 
2000-2001 and specifically not to authorize the use of such funds 
for additional Overtime. Any remaining unspent funds can then 
be added to the City's FY 2000-2001 General Fund year-end 
surplus. 



Board of Supervisors 
Budget Analyst 
56 



Memo to Finance and Labor Committee 

May 23, 2001 Finance and Labor Committee Meeting 

Recommendations: 1. Reduce this request for a release of $1,700,195 for Police 
Department Uniform Salaries by $645,022 to $1,055,173. 

2. Direct the Controller to use such remaining reserved funds 
only to offset other Police Department non-salary deficits at the 
close of FY 2000-2001 and to specifically not to authorize the use 
of such surplus funds for Overtime. 

3. Approve the release of reserved Uniform Salary funds in the 
amount of $1,055,173. 



Board of Supervisors 

Budget Analyst 

57 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Item 10 - File 01-0759 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Budget: 



Department of Human Services (DHS) 

Hearing to consider the release of reserved funds in the 
amount of $811,317 for Department of Human Services' 
leases. 

$811,317 

FY 2000-2001 DHS budget 

During the FY 2000-2001 budget review,- the Board of 
Supervisors appropriated and reserved $1,309,200 for 
DHS leases. 

DHS is requesting release of $811,317. Based on the 
Budget Analyst's review, the total amount needed is 
$807,474, or $3,843 less than the request. 

The proposed budget for six new leases, two amended 
leases, and other lease adjustments is $807,474, as shown 
in the table below. 



3120 Mission Street, new lease (6/1/01 to 6/30/01 or one month) $77,700 

(less sublease payments) (11,475) 

1800 Oakdale Avenue, new lease (1/1/01 to 6/30/01 or 6 months) 4,193 

3801 Third Street, new lease (12/1/00 to 6/30/01 or 7 months) 133,409 

165 Capp Street, new lease (1/ 1/01 to 6/30/01 or 6 months) 78,000 

745 Franklin Street, new lease (2/1/01 to 6/30/01 or 5 months) 17,200 

1650 Mission Street, new lease (3/1/01 to 6/30/01 or 4 months) 28,000 
1650 Mission Street, 2 nd Floor, amendment of existing lease 

(11/1/00 to 6/30/01 or 8 months) 58,350 
1650 Mission Street, 3 rd Floor, amendment of existing lease 

(11/1/00 to 6/30/01 or 8 months) 361,344 

Other lease adjustments 60,753 

Total $807,474 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

58 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Comments: 1. As of the writing of this report, the proposed lease for 

the Career Link One Stop Center at 3120 Mission Street 
has been recommended for approval by the Finance 
Committee and is pending before the Board of 
Supervisors (File 01-0764). 

2. According to Ms. Rose Chow of DHS, DHS leased space 
at 1800 Oakdale Avenue for the Bayview Hunters Point 
Career Center, effective January 1, 2001. The total lease 
cost for this space is $4,193 (1,792 square feet of space @ 
$0.39 per square foot per month, or $699 per month, 
totaling $4,193 for 6 months). This lease was not subject 
to Board of Supervisors approval because the monthly 
rent is less than $1,000 (Administrative Code Section 
23.19). 

3. The Board of Supervisors approved a new lease at 3801 
Third Street to occupy three office suites for the DHS 
Family and Children Services Unit, effective December 1, 
2000 (File 00-1707). The total lease cost in FY 2000-2001 
for this space is $133,409 (9,207 square feet @ $2.07 per 
square foot per month, or $19,058 per month, totaling 
$133,409 for 7 months). 

4. The Board of Supervisors approved a new lease at 165 
Capp Street for the Mission Neighborhood Resource 
Center, effective January 1, 2001 (File 00-2007). The total 
lease cost in FY 2000-2001 for this space is $78,000 (6,500 
square feet @ $2.00 per square foot, or $13,000 per month, 
totaling $78,000 for 6 months). 

5. Ms. Chow states that DHS entered into a new lease at 
745 Franklin Street for the Career Link One Stop 
Center 1 , effective February 1, 2001. The total lease cost 
in FY 2000-2001 for this space is $17,200 (2,606 square 
feet @ $1.32 per square foot per month, or $3,440 per 
month, totaling $17,2000 for 5 months). The subject lease 
was not subject to Board of Supervisors approval because 
it is a month-to-month lease for less than $5,000 per 
month (Administrative Code Section 23.26). 



1 According to Ms. Chow, the Career Link One Stop Center at 745 Franklin Street is a satellite office 
of the main Career Link One Stop Center at 3120 Mission Street, providing some but not all of the 
services available at 3120 Mission Street. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

59 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



6. According to Ms. Chow, DHS has entered into a 
sublease at 1650 Mission Street for office space for the 
DHS Contracts Division, effective March 1, 2001. Ms. 
Chow states that DHS is subleasing this space from the 
Private Industry Council, a nonprofit organization, which 
vacated the subject space prior to March 1, 2001. The 
total sublease cost in FY 2000-2001 is $28,000 (3,500 
square feet @ $2.00 per square foot per month, or $7,000 
per month, totaling $28,000 for 4 months). 

7. The Board of Supervisors approved two amendments to 
an existing lease at 1650 Mission Street to lease space on 
the second and third floors for office space for the DHS 
Adult Services Unit, effective November 1, 2000 (File 00- 
0784). The lease cost in FY 2000-2001 for the second floor 
is $58,350 (1,945 square feet @ $3.75 per square foot per 
month, or $7,294 per month, totaling $58,350 for 8 
months). The lease cost in FY 2000-2001 for the third 
floor is $361,344 (10,210 square feet @ $4.42 per square 
foot, or $45,168 per month, totaling $361,344 for 8 
months). 

6. As shown in Attachment I, provided by DHS, DHS is 
also requesting $59,867 for increased operational and 
janitorial expenses in existing leases and $4,685 for a 
rental rate increase at 50 Van Ness Avenue, offset by a 
net reduction of $3,799 in other expenses, for a total 
request of $60,753 ($59,867, plus $4,685, less $3,799). 

7. The attached memorandum (Attachment II), provided 
by Ms. Sally Kipper of DHS, provides an explanation of 
the request by DHS to continue to reserve $319,200 for 
the Family Assessment Center. According to Ms. Kipper, 
of the amount of $319,200, approximately $111,720, or 35 
percent are General Fund monies, and $207,480, or 65 
percent, are State and Federal monies. 

8. The Budget Analyst notes that DHS has already 
incurred expenditures for the subject leases and considers 
retroactive approval of the requested release of $807,474 
to be a policy matter for the Board. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

60 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

9. Of the total amount of $1,309,200 held on reserve, the 
Budget Analyst considers retroactive release of $807,474 
to be a policy matter for the Board of Supervisors, as 
noted in Comment 8, and recommends holding $319,200 
on reserve (see Comment 7) and returning $182,526 
which is not needed to the General Fund ($804,474, plus 
$319,200, plus $182,526, totaling $1,309,200). 

Recommendations: 1. Retroactive approval of the release of $807,474 is a 

policy matter for the Board of Supervisors, as noted in 
Comment 8. 

2. Continue to reserve $319,000 and return $182,526 in 
unneeded funds to the General Fund, as noted in 
Comment 9. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

61 



Attachment I 



City and County of San Francisco 



Department of Human Services 




Trent Rhorer 
Acting Executive Director 

Deputy Directors 

Janice Anderson-Santos (acting) 

Jim Buick 

Sally Kipper 





Rent Budget and Site Details 




FY 2000- 












Total Cost 


2001 
Budget 


Surplus/ 
(Deficit) 


Location 


Sq. Ft. 


Cost/ 


Rate/ Mo 


Months 






SqFt/ 
















Mo 












New Leases 


37,000 


$2.10 


$77,700 


1 


$77,700 


$0 


($77,700) 


3120 Mission St, Career Link One Stop Center 


3120 Mission St, Sublease payments 










(11,475) 





11,475 


1800 Oakdale Ave, Room 123 


1,792 


0.39 


699 


6 


4,193 





(4,193) 


3801 Third Street, Rm 1 14, 200, and 235 


9,207 


2.07 


19,058 


7 


133,409 





(133,409) 


165CappSt 


6,500 


2.00 


13,000 


6 


78,000 





(78,000) 


745 Franklin St 


2,606 


1.32 


3,440 


5 


17,200 





(17,200) 


1650 Mission St 
Subtotal, New Leases 


3,500 


2.00 


7,000 


4 


28,000 





(28.000) 


($327,027) 


Expansion of Existina Space 


1,945 


3.75 


7,294 


8 


58,350 





(58,350) 


1650/2 Mission St 


1650/3 Mission St 

Subtotal, Expansion of Existing Space 


10,219 


4.42 


45,168 


8 


361,344 





(361.344) 


($419,694) 


Add-Ons to Existinq Leases 










24,880 





(24,880) 


1235 Mission St, Operational Expenses 


1235 Mission St, OSHA Citation 










300 





(300) 


1650/2 Mission St, Operational Expenses 










44,591 


19,368 


(25,223) 


1650/3 Mission St, Operational Expenses 










11,091 


10,212 


(879) 


160 S Van Ness Ave, Janitorial Expenses 










32,400 


28,800 


(3,600) 


225 Valencia St, Janitorial Expenses 










27,444 


23,844 


(3,600) 


50 Van Ness Ave, Operational Expenses 
Subtotal, Add-Ons to Existing Leases 










10,181 


8,796 


(1.385) 


($59,867) 


Rental Rate Increase 










73,445 


68,760 


(4.685) 


50 Van Ness Computer Lab 
Subtotal, Rental Rate Increase 


($4,685) 


Other Adjustments 










196,127 


193,513 


(2,614) 


Rent, 1650 Mission St 


Parking Garages 










193,920 


193,325 


(595) 


Rent, 1800 Oakdale 
Subtotal, Other Adjustments 










27,337 


34,345 


7.008 


$3,799 


Total 














($807,474) 



FY 00-01 Rent Budget Sheet 

Source: Department of Human Services 



(415)557-5000 



P.O. Box 7988 
62 



San Francisco, California 94120 



MAY-17-2001 14=38 



DEPT OF HUMAN SUCS Attachment II 4 15 431 9270 P.02/03 

"Page 1 or z 

City and County of San Francisco 



Department of Human Services 




Trent Rhorer 
Executive Director 

Deputy Directors 

Janice Anderson Santos (Acting) 

Jim Buick 

Sally Kipper 



May 17,2001 






MEMO 

To : 3 c verin Campbell, Budget Analyst Office Of~» 
From: Sally Kippper, Deputy Director - Administration 
Re: Family Assessment Center 

This is to give you a little background on the Family Assessment Center as a basis for our request to maintain 
and carry forward the current year rent allocation attached to it 

In 1998 the City, over the Mayor's signature, issued a statement of commitment to plan for an 
interdisciplinary Family Assessment Center. It includes commitments from several City departments and 
nonprofit child welfare service providers. The goal of the center is to provide collaborative and 
comprehensive services to traumatized children who have been removed from abusive or neglectful parents 
and to their families. It is intended that DPH Mental Health and Family Court Services staff will be co- 
located there, 

In 1999 the Board passed Resolution #1 1 14-99 to authorize the Department of Human Services to accept and 
expend grants from the Zellerbach Family Fund and the Stewart Foundation to hire a consultant to work on 
planning and implementation of a family assessment center. 

The department and the consultant have identified a 46,000 sq. ft building, with 37,520 sq ft of outdoor space, 
at 3rd St. and Chesar Chavez. The outdoor space is critical because there will be significant traffic in and out 
of the cen tec associated with visits by natural parents, foster parents with kids and service partners, and for 
supervised outdoor activities for children and their families. We are in negotiation with the landlord and his 
developer on a rental rate. They are currently at S2.4M, which is too high. Real Estate is working on comps 
so that we cati bring the rate down. We are trying very hard to make this site work because it has been 
extremely difficult and time consuming to locate appropriate spce. 

Once that is finalized, we will be bringing a lease to the Board. Upon approval of the lease, permit and 
construction work will begin. We anticipate that it will take six to eight months to ready the building for 
occupancy from the point of agreement on the rental rate. 

We currently have SIMillion budgeted for rent for the center in 01/02. Based on preliminary negotiations, we 
know that won't be enough, even for six months. The ability to carry forward the $320,000 on reserve would 
therefore help us. 



(415) 557-5000 



P.O. Box 7988 



San Francisco, California 94120 



63 



MAY- 17-2081 14=38 



DEPT OF HUMAN SUCS Attachment II 415 431 9270 P. 03/03 

Page Z ol z 



Severin Campbell 
May 17.2001 
Page 2 



The feds are looking at the center a pilot project and are expected to allocate the SI Million as a 100% federal 
cost (We don't have that in writing yet, and the SIM will probably be reserved in our budget until we do.) 
The 5320,000 will be claimed as a regular-overhead cost, which is shared 35% County, 65% state/fed. 

Please call me at 557-6378 if you have questions or need additional information. 



TOTFtL P. 03 



64 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 11- File 01-0731 



Department: 



Item: 



Amount: 



Department of Administrative Services 
Convention Facilities Management (CFM) 

Release of reserved funds in the amount of $610,100 for 
the replacement of audio visual control security system 
equipment for the security room at the Moscone 
Convention Center security room. 

$610,100 



Source of funds: 



Description: 



1994 Moscone Lease Revenue Bonds and 1994 San 
Francisco Redevelopment Agency Hotel Tax Revenue 
Bonds in the amount of $32,117,349 were appropriated, 
and $22,973,795 was placed, on reserve, by the Board of 
Supervisors in April of 1995 for Moscone Convention 
Center capital improvements. 

In 1995 a supplemental appropriation for $32,117,349 
was approved for funding (1) debt service payments for 
capital improvements to the Moscone Convention Center, 
and (2) construction of the Children's Center on the roof of 
the Moscone Convention Center South. 



The Board of Supervisors placed on reserved $22,973,795 
of the $32,117,349 to fund various capital improvement 
projects for the Moscone Convention Center (File 101-94- 
76) because, contractors had not yet been selected and 
detailed budgets had not yet been prepared which fully 
identified the use of those funds. To date $3,753,591 has 
been released from the reserve by the Board of 
Supervisors with $19,220,204 remaining in reserve. 

According to Mr. Leonard Tom of Convention Facilities, 
the subject $610,100 for the replacement of audio visual 
control security system equipment for the security room is 
being sought at this time to replace existing equipment at 
the Moscone Convention Center that is more than 20 
years old. The anticipated completion date of this project 
is the end of calendar year 2001. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

65 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Budget: A summary of the proposed expenditure of the reserved 

funds is shown below. 

Amount Description 

$22,300 Design and specifications by TEECOM 1 

Site preparation by the Moscone Center 

20,000 Joint Venture 2 

Equipment and Installation by W. Bradley 
Electric Inc. (only competitive bid submitted; 

483,300 see below) 

Supervision by Department of Public 

29,000 Works 3 

55,500 Contingency (9.1 percent of the total project 

cost) 
$610,100 Total 

According to Mr. Leonard Tom of the San Francisco 
Convention Facilities, only one bid, from W. Bradley 
Electric Inc., was received by the Convention Facilities 
Management for the audio visual control security system 
equipment for the security room at the Moscone 
Convention Center. The Attachment to this report is a 
memorandum, provided by Mr. Tom of CFM, containing 
additional data pertaining to this request. 



1 TEECOM would complete design and specification work. TEECOM, is an information technology 
and building system integration consultant. TEECOM is a design contractor for the Moscone West 
development project, selected through a competitive Request for Proposal (RFP) process. 

2 The site preparation efforts include the replacement of carpeting, installation of lighting and 
security room reconfiguration and would be completed by the Moscone Center Joint Venture, 
consisting of SMG and Thigpen Limited, Inc. The Moscone Joint Venture is fully responsible under 
the direction of the City, for managing, operating and maintaining the Bill Graham Civic Auditorium 
and Moscone Center. Specifically, Moscone Joint Venture's responsibilities include: (1) contracting 
with others for their use of the convention facilities; (2) promoting the use of the convention facilities; 
(3) conducting event management activities; (4) recruiting, employing, supervising and paying 
employees; and (5) maintaining the convention faculties and the equipment therein. 

3 DPW supervision is being carried out by a Project Manager II (class 5504) at a cost of $104 per hour 
for approximately 279 hours worth of work. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

66 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Comment: According to Mr. Tom, the existing security room desk 

console area would be replaced with new equipment that 
meets current ergonomic standards. The audio visual 
control security system to be purchased would also allow 
a digital recording system and would provide real time 
recording ability to archive security incidents. 

Recommendation: Approve the requested release of reserved funds in the 

amount of $610,100. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

67 




. •■•■ .... .-..-:■•■•. Attachment -' 

WFk*=~£-' : i r^t:*A.li : .i- [.'■■■-■'. :.• '../'' "' : .■■".'■"•"■''•. ' v . '•.".••■■■'■■;•>:••-■.;".'■. 

"City and County of San Francisco San Francisco Convention Facilities 

Willie Lewis Brown, Jr. 
Mayor 

/ JaokMoerschbaecher 

/ Director 

MEMORANDUM 

DT: May 15. 2001 

TO: Pascal SL Gerand 

FM: Leonard Tom L^f 

RE: Moscone Security Room Equipment Release of Reserve 

I am sending this memo to respond to your recent questions regarding our request for a release of reserve by the 
Finance Committee of the Board of Supervisors. 

1 . , There were no other competitive bids to W. Bradley Electric, Inc. 'In December 2000, the City Purchaser 
issued a request for bids for the Security Room Equipment. No bids were submitted on the bid due date in 
January 2001 . Subsequent contacts with potential suppliers yielded only Bradley making a response that 
was considered adequately responsive to the City's requirements. 

2. Additional supervisory services are needed to plan and coordinate the design and implementation of this 
equipment replacement request. The existing security equipment is twenty plus years old and current 
technology is required to replace outdated equipment and upgrade our capabilities. Further, the new 
equipment will serve trie expansion of the convention center (Moscone West) as well as the existing 
facility. DPW can provide the expertise necessary to develop the equipment specifications, select the 
equipment supplier and oversee the installation. This will be far more cost effective and efficient than 
training and relying on contractors to provide the same service. 

3. TEECOM is an information technology and building systems integration consultant They have the 
technical expertise to prepare the equipment specifications for the security control room. They are a part of 
the design team for Moscone West so they are well familiar with the IT needs of our systems and are a 
logical choice for preparation of the specifications. TEECOM also happens to be an HRC-cert'rfied, 
Woman-Owned, Business Enterprise. 

4. Per my response in 3. Above, TEECOM was already available to the City by existing contract so this work 
is en addition to their scope of services. 

5. DPW supervision is being carried out by a Project Manager 2 (class 5504) who has a thorough 
understanding of our requirements, and the technical expertise and experience to successfully coordinate 
and supervise this equipment upgrade. The current cost charged by DPW for the PM 2 is $104 per hour, 
including salary, fringe, paid time off and departmental overhead. The budgeted amount for DPW 
supervision is sufficient to pay for 279 hours of coordination and supervision time. This is about seven 
weeks spread out over a period of a year or so. 

6. Site preparation for this effort ($20,000) includes removal and replacement of carpeting, paint, lighting etc. 
within the security room. Materials and labor will be provided by Moscone Center Joint Venture (operator 
of the Moscone Convention Center) and coordinated with the equipment supplier. 

If you have any other questions please call me at 978-5905. 

Attachment 

Cc: J. Moerschbaecher 

CFM projects/security 051 501 

99 Grove Street, #204, San Francisco, CA 94102 ~ Telephone (415) 554-6178 Fax (415) 978-5913 



68 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 12 - File 01-0815 



Department: 
Item: 

Location: 
Lessor: 

Lessee: 

No. of Sq. Ft. and 

Monthly Rental: 

Annual Rent: 
Term of Lease: 
Right of Renewal: 

Source of Funds: 
Lessor Services: 



Department of Administrative Services 
Department of Elections 

Resolution approving a new lease of real property 
located at 1667 Market Street on behalf of the 
Department of Administrative Services, for the 
Department of Elections. 

1667 Market Street, at Gough Street 

The Kerson Family Trust/ Silberstein & 
Constantine Holdings, LLC 

Department of Elections 



18,500 square feet at a monthly rent of $57,291.67 
per month (approximately $3.10 per square foot per 
month). 

$687,500 annually at the same rate for all five 
years of this proposed lease. 

Five years, beginning approximately September 1, 
2001 

Option to renew for an additional five years at 95 
percent of the then fair market value, as 
determined by independent appraisals obtained by 
the Division of Real Estate and the lessor. 

General Fund to be included in the FY 2001-2002 
budget of the Department of Elections 

Lessor would be responsible for taxes, insurance, 
maintenance of the structural components of the 
building (i.e., roof, foundation, exterior, etc.) and 
HVAC and elevator maintenance as well as 
janitorial, water, sewer, trash and miscellaneous 
repairs. 



BOARD OF SUPERVISORS 
BUDGET- ANALYST 

69 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Lessee 

Responsibilities: The City would be responsible for the Department's 

pro rata share of any increase in the Lessor's 
operating costs in excess of the 2002 base year. In 
addition, the City would be responsible for gas and 
electrical services and any other direct operational 
costs of the Department within the premises. 

Tenant Improvements: The proposed resolution would require the Lessor 

to construct and pay for tenant improvements, as 
requested by the City, of up to $650,000. The City 
would be required to pay for any requested tenant 
improvements exceeding $650,000. The subject 
lease also states that if the tenant improvements 
cost less than $650,000, the Lessor would pay the 
differential amount of up to $650,000 to the 
Department of Elections to offset their costs 
associated with relocation to the new facility (See 
Comment No. 3). 

Comments: 1. According to Mr. Ara Minasian of the 

Department of Administrative Services, there are 
currently 16 FTE staff (8 Permanent positions and 
8 Temporary positions) employed in the 
Department of Elections. The Department of 
Elections FY 2000-2001 budget authorizes 39 FTE 
staff (15 Permanent positions and 24 Temporary 
positions). Mr. Minasian advises that during a Fall 
election season, which extends from approximately 
September through early January, the Department 
hires additional Temporary staff, expanding up to 
126 additional employees. 

Mr. Minasian advises that the Department has 
proposed an expansion of the existing 15 FTE 
Permanent positions to 24.75 FTE Permanent 
positions, an increase of 9.75 new FTE Permanent 
positions in the upcoming FY 2001-2002 budget. 
According to Mr. Minasian, it is anticipated that 
the level of Temporary staffing will remain the 
same, at approximately 24 FTE Temporary 
positions, although the funding for such Temporary 
positions is anticipated to increase by $50,000 from 
$850,000 in the current fiscal year to $900,000 in 
FY 2001-2002, due to an adjustment in the pay 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

70 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



scales for such employees. Overall, the current 39 
FTE staff is therefore requested to increase to 
48.75 FTE staff. According to Ms. Taylor Emerson 
of the Mayor's Office, the Mayor's proposed FY 
2001-2002 budget is anticipated to include these 
48.75 FTE positions and an additional $396,638 for 
salaries for the Department of Elections. 

2. As discussed in Attachment I, provided by Ms. 
Mary Hob son of the City Architects Office, the 
Department of Elections currently occupies 12,790 
square feet of ground floor of space in City Hall on 
a year-round basis. This 12,790 square feet of space 
includes two large ballot storage rooms, comprising 
a total of 2,090 square feet, that were originally 
used by City Hall Building Operations to store City 
Hall building supplies (i.e., paper towels, toilet 
paper, heat pumps, air filters, etc.). According to 
Ms. Emerson, the purchase of City Hall building 
supplies has been reduced and such supplies are 
currently being temporarily stored throughout the 
basement of City Hall, which reduces the efficiency 
of the building's operations. 

3. The proposed resolution would approve a new 
lease for 18,500 square feet of office and storage 
space for the Department of Elections, on a year- 
round basis. Therefore, the proposed lease would 
provide 5,710 square feet of additional office and 
storage space for the Department (18,500 square 
feet proposed less 12,790 square feet existing 
space). 

In addition, the Department currently rents 
approximately 7,000 square feet of warehouse 
space at Pier 29 from the Port at a cost of 
approximately $5,600 per month ($67,200 
annually) for storing old ballots and equipment 
needed on election days. The Department advises 
that if the proposed new lease is approved, the 
Department would still require the Pier 29 
warehouse space for additional storage purposes. 

Ms. Emerson advises that during the November of 
2001 election period, the Election Department's 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

71 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



activities expanded to additional conference rooms, 
the basement corridors, and adjacent hallways for a 
total of an additional 7,720 square feet of space. 
According to Ms. Christiane Hayashi of the 
Department of Elections, during the November of 
2000 elections, the Department also rented 
additional space for two days at Bill Graham 
Auditorium and for approximately two to three 
weeks at Brooks Hall. Mr. Minasian advises that, 
since this space was available, the Convention 
Facilities Division provided this space to the 
Department of Elections at no additional cost. 
These additional facilities were required to 
assemble the ballots, canvass each of the precincts 
and fully review the counts. Mr. Philip Paris of the 
Department of Elections advises that, if the 
proposed new lease is approved, the Department 
would not need to rent any additional space during 
the election period, as was previously necessary. 

Ms Hayashi advises that using these temporary 
facilities that were not immediately adjacent to the 
Department's offices, as well as using various other 
cramped spaces in City Hall resulted in sig nifi cant 
additional staff time and inefficiencies that would 
not occur if the Department's offices and assembly 
space were located together. In addition, Ms. 
Emerson notes that the Department was required 
to spend approximately $75,000 to repair the tile 
and historic marble that was damaged by the 
Election Department's equipment and activities 
that occurred in the corridors of City Hall. Ms. 
Hayashi advises that although a substantial 
amount of staff time was unnecessarily expended 
because of insufficient space available for the 
Department of Elections, she cannot estimate the 
amount of additional time and costs that were 
expended. Ms. Emerson advises that the proposed 
FY 2001-2002 budget assumes that st affin g 
efficiencies will occur with this new lease, although 
the exact amount cannot be quantified as of the 
writing of this report. 

As indicated in Attachment I, the Department has 
also requested that if the proposed new lease is 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

72 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



approved, that approximately 800 square feet of 
office space be maintained for the Department of 
Elections in City Hall to facilitate public access for 
the Department. 

If the proposed 18,500 square foot lease is 
approved, and the Department retains the 7,000 
square foot warehouse space on Pier 29 and 
maintains an 800 square foot office in City Hall, 
the Department of Elections total office and storage 
space would be 26,300 square feet. As discussed 
above, the Department currently has a total of 
19,790 square feet of office and storage space 
(12,790 square feet in City Hall and 7,000 square 
feet on Pier 29). Therefore, the total proposed office 
and storage space for the Department would 
increase from 19,790 square feet to 26,300 square 
feet, an increase of 6,510 square feet, or a 32.9 
percent increase on an ongoing basis. Ms. Emerson 
notes that, as indicated above, the Department of 
Elections also required an additional 7,720 square 
feet of space during the November of 2000 election 
period, such that according to Ms. Emerson's 
calculations, the subject lease actually results in a 
loss of 1,210 square feet. However, the Budget 
Analyst notes that the additional 7,720 square feet 
of space was not needed for the entire year, but 
only during the height of the election season and 
the additional 7,720 square feet of space did not 
result in any additional rental expenses for the 
City, such that the proposed lease will result in an 
increase of 6,510 square feet, or a 32.9 percent 
increase and an additional annual cost of $687,500 
on an ongoing basis. 

4. Attachment II, provided by the Mayor's Office 
shows a preliminary relocation project budget of 
$1,140,000, of which $607,750 is for tenant 
improvements and $42,250 for Design/Coordination 
services, which total $650,000. This amount of 
$650,000 would be paid by the Lessor. As of the 
writing of this report, the Department does not 
have detailed cost estimates for the proposed 
$650,000. Ms. Hobson advises that she anticipates 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

73 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

receiving detailed cost estimates from the 
contractor by May 18, 2001. 

As shown in Attachment II, the Department 
anticipates that as part of the total estimated 
relocation budget of $1,140,000, an estimated 
$490,000 would be required to complete the move, 
including funds for Space Planning and Furniture 1 
($117,000), Moving costs ($10,000), Project 
Management ($13,000) and Data/Voice Wiring and 
Equipment ($350,000). This estimated $490,000 
would need to be funded with General Fund 
revenues. Mr. Minasian advises that, although the 
proposed budget as shown in Attachment II 
identifies $350,000 for the Department of 
Telecommunications and Information Services 
(DTIS), DTIS has advised the Department of 
Elections that the actual cost will be approximately 
$600,000, or $250,000 more than shown on 
Attachment II, for all of the telecommunications, 
data wiring, new PacBell lines and wire 
connections to City Hall that would be required to 
make the new Department of Elections space fully 
operational. However, as of the writing of this 
report, DTIS could not provide detailed cost 
estimates to the Budget Analyst. 

Therefore, the Budget Analyst notes that the 
proposed total relocation budget for the 
Department of Elections would be $1,390,000 
($1,140,000 as shown in Attachment II, plus 
$250,000 for DTIS), of which the lessor would pay 
for $650,000, such that the City would be 
responsible for funding $740,000 of one-time 
expenses from the General Fund. Ms. Emerson 
advises that any additional DTIS costs, not 
included in Attachment II, would need to be funded 
through DTIS's annual $1 million Citywide 
allocation for telephone services. Ms. Emerson 
advises that, if the proposed lease is approved, the 
Mayor's Office anticipates including $572,917 



1 All furniture purchased for City Hall is required to stay in City Hall, such that the 
Department of Elections would not be permitted to move any of their existing furniture to the 
new lease site. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

74 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



(based on an estimated ten months of occupancy 
from September 1, 2001 through June 30, 2002) for 
the new lease costs and $490,000 for the one-time 
improvements, or total costs of $1,062,917 in the 
Department of Elections FY 2001-2002 budget. 

5. Mr. Steve Legnitto of the Department of Real 
Estate advises that the proposed office space 
includes two floors plus the mezzanine in the 
building at 1667 Market Street. According to Mr. 
Legnitto, the proposed monthly rental rate of $3.10 
per square foot, or $37.20 annually per square foot 
represents the current fair market value for the 
subject property. According to Mr. Legnitto, the 
original lease was to extend for ten years, but, the 
lease was reduced to the proposed period of five 
years, in order to enable the Department of 
Elections to potentially relocate after five years to a 
City-owned facility. 

6. Mr. Paris advises that if the proposed resolution 
is approved, the Department would move into the 
proposed new space in early September of 2001, 
resulting in 10 months of rent for FY 2001-2002. 
According to Mr. Paris, this move would enable the 
Department to be fully operational in the new 
space for the November of 2001 election. 

7. According to Ms. Hobson, if the proposed lease is 
approved, it has not yet been decided who will 
move into the Department of Elections current 
space in City Hall. Of the 12,790 square feet of 
space currently occupied by the Department of 
Elections, 2,090 square feet would be used by City 
Hall Building Operations for storage of building 
supplies and according to Ms. Hobson, 800 square 
feet of space is being requested by the Department 
of Elections, leaving a balance of 9,900 square feet 
of space. Ms. Emerson advises that decisions about 
backfilling the space at City Hall would have to 
consider: (1) individual City department space 
needs, (2) appropriate fit of the existing space with 
workflow and public interaction, and the (3) 
potential for reduced expenditures in existing City 
leases. If a City Department moves from existing 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

75 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

leased space to City Hall, there would be a savings, 
potentially to the City's General Fund, for such 
leased expenses, which could partially or fully 
offset the proposed increased relocation costs for 
the Department of Elections. However, an estimate 
of such offset savings is not known at this time and 
it is not known at this time if any department 
plans to leave their existing leased facility and 
move into the Department of Elections current 
basement space in City Hall, according to Ms. 
Emerson. 

8. In summary, the proposed resolution would 
authorize the Department of Elections to lease 
18,500 square feet of space at 1667 Market Street 
and to move out of the 12,790 square feet of space 
in the basement of City Hall. The annual rental 
costs of the new lease would be $687,500. The 
Department does not currently pay for use of City 
Hall space. In addition, one-time costs of up to 
$1,390,000 are projected, of which the landlord 
would pay $650,000 and the remaining $740,000 
would be a City expense. Of the City's $740,000 
obligation, $490,000 would be new General Fund 
expenses and the remaining $250,000 would be 
paid from DTIS's $1 million annual appropriation 
for City-wide telephone services. There could be 
some offset of existing leased costs if another 
General Fund department relocates from leased 
space and is transferred into the current 
Department of Elections space in City Hall. 
However, as of the writing of this report, there is no 
estimate of such offset savings in leased costs or 
whether any department will vacate their existing 
leased space. 

Recommendation: Approval of the proposed new lease for the 

Department of Elections is a policy matter for the 
Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

76 



/<0^S§\ 




mSB^i 


OFFIC 


xlglp 7 




WILLIE L. BROWN, JR. 




MAYOR 




ANTHONY E. IRONS 




CITY ARCHITECT 




Memorandum 




To: 


Taylor Emerson 


From: 


Mary Hobson 


Date: 


May 2, 2001 



Attachment I 
Pige~T~oFT~ 

ICE OF THE CITY ARCHITECT 



Subject: Evaluation of the Assessor's Office as a Possible Back-fill Tenant 

for City Hall Office Space Vacated by the Department of Elections 

The Department of Elections currently occupies 12,790 square feet of ground floor office 
space in City Hall on a year-round basis. The department will vacate this area when it 
relocates later this year. 

Included in the 12,790 square feet of Elections space, are two large ballot storage rooms 
originally utilized by City Hall Building Operations to store building supplies. It is 
recommended that these two rooms be returned to their original function. This will reduce 
the available space to be back-filled by other City departments to 10,700 square feet. In 
addition, it is the request of the Department of Election that approximately 800 square feet 
of office space be reserved by them for use as a satellite office to facilitate public access. 

The area available is currently broken into 17 individual rooms. The space has two 
reception areas, three private offices, one conference room, one public access file room, 2 
secured file storage rooms, and 7 rooms containing open office designed to accommodate 
approximately 35 people. 

At your request I have completed a brief study of whether the Assessor's Office staff 
currently located at 875 Stevenson is a good match to back fill the space. It is my opinion 
that with minor building modifications, this group could effectively use the space. It is also 
my opinion, that with space plan and furniture modifications the space could be more 
efficiently utilized. The Assessor's Office could then be accommodated within a portion of 
the available area, and the remaining space would then be available for use by another City 
department. 

Our office is in the process of identifying other possible City Departments that may be 
interested in the available space. While the Assessor's Office from 875 Stevenson is a 
possible candidate, I recommend that a more detailed evaluation be made before a final 
decision is made. I have attached is brief analysis of my findings. Please feel free to 
contact me to discuss this further. 

Cc: Ryan Brooks, Admin. Services 

Yomi Agunbiadi, City Architect's Office 



Room 495, City Hall, 1 Dr. Carlton B. Goodlet Place, San Francisco, CA 94102 Tel: (415) 554-4531 Fax: (415) 554-4509 

Recycled Paper 



20 -d "tblOi 



Attachment II 
Page 1 of 1 



ELECTIONS RELOCATION 
PRELIMINARY PROJECT BUDGET 



Relocation of Elections to 1667 Market Street 


Preliminary Budget 


City Budget 
FY 00/01 FY 01/02 


Tenant Improvements TBD 


$607,750.00 


$0.00 


$0.00 


Design/Coordination Komorous Towey Architects 


$42,250.00 


$0.00 


$0,00 


Space Planning & Used Furniture Interior Motion 


$117,000.00 


$0.00 


$117,000.00 


Move Services Lynch & Sons 


$10,000.00 


$0.00 


$10,000.00 


Project Management Office of the City Architect 


$13,000.00 


$0.00 


$13,000.00 


* DateA/oice Wiring & Equipment DTIS 


$350,000.00 


$0.00 


$350,000.00 




Total: 


$1,140,000.00 








Total Owner Financed: 


$650,000.00 








Total City Financed: 


$490,000.00 


$0.00 


$490,000.00 



* DTIS budget Is very preliminary. More accurate figures will be available after a 6/8 site tour. 



5/9/2001 
-MEOOOOO 



^ 1 1 h-iq t qqn i qnana saoAou 



GZ-.UT X00S-60-At 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 13 - File 01-0816 



Departments: 



Item: 



Location: 



Lessor: 



Lessee: 



No. of Sq. Ft. and 
Cost Per Month: 



Annual Rent 
Increases: 

Utilities: 

Janitorial Services: 

Term of Lease: 

Right of Renewal: 



Department of Administrative Services, Real Estate 

Division (RED) 
Department of Public Health (DPH) 

Resolution authorizing a new lease of 4,945 square feet at 
1500 Howard Street for the Department of Public Health's 
Community Mental Health Services Mobile Crisis 
Treatment Team, which is currently located at 1380 
Howard Street. 

The proposed lease is for the rental of space located on the 
ground and second floors of 1500 Howard Street. 

ARC San Francisco (formally the Association for Retarded 
Citizens), a non-profit agency 

City and County of San Francisco, acting by and through 
DPH. 



4,945 square feet at a monthly rental rate of $13,000 
(approximately $2.63 per square foot). On an annual basis, 
rent would total $156,000 (approximately $31.55 per 
square foot per year). 



None over the 5 year term of the lease. 

Provided by the landlord. 

To be provided by the City at an estimated annual cost of 
$11,868. 

Anticipated commencement date is July 1, 2001 through 
June 30, 2006 (five years). 

Two options of five years each to extend the term of the 
lease. Each option to extend would increase the rent to 95 
percent of the then current fair market value as determined 
by the Real Estate Division for space of comparable size, 
age, quality, and location within the Civic Center area of 
the City. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

79 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Source of Funds: 



Description: 



Rental payments will be funded by 68 percent State and 
Federal grants and 32 percent General Fund monies, 
subject to appropriation approval by the Board of 
Supervisors in the DPH annual budget. 

The proposed resolution would authorize a new five year 
lease of 4,945 square feet of space at 1500 Howard Street 
from the ARC San Francisco, a non-profit agency. This 
space would accommodate DPH's Community Mental 
Health Services Mobil Crisis Treatment Team, which is 
expanding by nine positions, from 19 to 28 employees, in 
FY 2001-2002. According to Ms. Judy Schutzman of DPH, 
such new positions will be subject to Board of Supervisors 
approval as part of the acceptance of a new grant from the 
State Department of Mental Health, anticipated to be 
received in June of 2001. Ms. Schutzman reports that no 
General Fund monies would be used to fund these nine new 
grant-funded positions. According to Ms. Schutzman, DPH 
anticipates hiring the nine staff members by September of 
2001. The Community Mental Health Services Mobil Crisis 
Treatment Team provides outreach to persons in crisis who 
are reported by the public, the Police Department and 
merchants as in need of emergency mental health 
intervention. 



Ms. Schutzman advises that the 19 existing employees of 
the Community Mental Health Services Mobil Crisis 
Treatment Team currently occupy 1,370 square feet of 
leased space at 1380 Howard Street (approximately 72 
square feet per employee). Under the proposed lease, these 
19 employees would move to 1500 Howard Street. In 
addition to the 19 existing employees who would relocate 
from 1380 Howard Street to 1500 Howard Street, DPH 
plans to expand the Community Mental Health Services 
Mobil Crisis Treatment Team by nine additional 
employees, for a total of 28 employees who would occupy 
the 4,945 square feet of space at 1500 Howard Street. The 
new location at 1500 Howard Street would provide the 28 
employees with approximately 176.6 square feet per 
employee, which is approximately 104.6 square feet more 
than the current average space of 72 square feet of space 
per employee (1,370 square feet divided by 19 employees) at 
1380 Howard Street. According to Mr. Charlie Dunn of the 
Real Estate Division, the typical amount of space per City 
employee ranges from 175 to 225 square feet. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

80 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Currently, the Community Mental Health Services Mobil 
Crisis Treatment Team operates 7 days per week for 14 
hours per day. The expansion of the Community Mental 
Health Services Mobil Crisis Treatment Team by nine new- 
employees will allow such services to be provided 24 hours 
per day, 7 days per week. 

Comments: 1. Mr. Dunn reports that the proposed monthly rent of 

$13,000 represents fair market value. 

2. According to Ms. Shutzman, the proposed lease requires 
DPH to pay a maximum of $27,335 for the City's share of 
improvement costs for paint, carpet, electrical work, and for 
the remodeling of the entrance on Howard Street, which 
currently does not meet Americans with Disabilities Act 
requirements. According to Ms. Schutzman, DPH will 
spend an additional $12,665 for telephone installation 
costs, for a maximum of $40,000 in improvement and 
telephone installation costs. According to Ms. Schutzman, 
General Fund monies, which would be subject to 
appropriation approval by the Board of Supervisors, would 
fund the entire amount of $40,000 for improvement and 
telephone installation costs. Ms. Schutzman advises that 
such improvement and telephone installation costs are 
included in DPH's proposed FY 2001-2002 budget. 
Mr. Dunn reports that the landlord will be responsible for 
any improvement costs above the $27,335 paid by the City. 
According to Mr. Dunn, as of the writing of this report, 
details on the total improvement costs are not available. 

3. According to Ms. Schutzman, the 1,370 square feet of 
leased space at 1380 Howard Street that would be vacated 
by Community Mental Health Services Mobil Crisis 
Treatment Team would be occupied by other DPH staff now 
occupying other leased space at that location in order to 
alleviate overcrowding. Ms. Schutzman states that, while 
375 DPH staff currently occupy approximately 70,000 
square feet at 1380 Howard Street, the average of 186.7 
square feet per employee is not representative of the state 
of overcrowding that currently exists at that location. Ms. 
Schutzman notes that this approximately 70,000 square 
feet of space includes common areas and space occupied by 
machinery at the DPH computing center at that location. 
According to Ms. Schutzman, DPH currently utilizes every 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
81 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

desk space available at 1380 Howard, and, for the last two 
years, has had a minimum of ten of its employees using 
desks that have been placed in hallways for lack of space. 
The space vacated by the Community Mental Health 
Services Mobil Crisis Treatment Team would reduce the 
number of employees at 1380 Howard Street from 375 to 
356, and increase the average square feet per employee 
from 186.7 to 196.7. 

4. Because the proposed lease includes space for nine new 
grant-funded positions, which have not yet been approved 
by the Board of Supervisors, the proposed resolution is a 
policy matter for the Board of Supervisors. 

Recommendation: Approval of the proposed resolution is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

82 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 14 -File 01-0819 



Department: 
Item: 



Services to be 
Performed: 

Description: 



Sheriff 

Resolution approving the Controller's certification that 
the Pretrial Court Diversion Services for inmates in the 
City and County of San Francisco can continue to be 
practically performed by a private contractor at a lower 
cost for the year commencing July 1, 2001, than if the 
work were performed by City employees. 



Pretrial Court Diversion Services 

Charter Section 10.104 provides that the City may 
contract with private firms for services which had been 
performed by City employees if the Controller certifies, 
and the Board of Supervisors concurs, that such services 
can in fact be performed by private firms at a lower cost 
than similar work services performed by City employees. 

The Controller has determined that contracting for the 
Pretrial Court Diversion Services for FY 2001-2002 would 
result in estimated savings as follows: 



City-Operated Service Costs 

Salaries 
Fringe Benefits 
Total 

Estimated Total Contract 
Cost 

Estimated Savings 



Lowest 

Salary 

Step 


Highest 
Salary- 
Step 


$628,807 

177.844 

$806,651 


$744,667 

196.057 

$940,724 


606.000 


606.000 


$200,651 


$334,724 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Comments: 



1. The Pretrial Court Diversion Services Project diverts 
selected misdemeanor offenders from the criminal justice 
system and places such offenders in the Pretrial Diversion 
Project to receive case management and referral to 
services such as vocational training, job placement, 
counseling, and substance abuse treatment. 

2. The Sheriffs Department reports that this service was 
first certified as required under Proposition J, (Charter 
Section 10.104) in FY 1977-78 and has been continuously 
provided by an outside contractor since that time. 

3. The prior one-year contract with the San Francisco 
Pre-Trial Diversion Project, the non-profit organization 
which provides the Pretrial Court Diversion Services, 
expires on June 30, 2001. The Sheriffs Department 
wishes to enter into a new contract for FY 2001-2002. 
Approval of the proposed resolution is required before the 
expired contract with the San Francisco Diversion Project 
can be renewed for FY 2001-2002. 

4. The Estimated Total Contract Cost used for the 
purpose of this analysis is the San Francisco Pretrial 
Court Diversion Services' projected FY 2001-2002 cost for 
the Pretrial Court Diversion Services. 

5. The estimated FY 2001-2002 Estimated Total Contract 
Cost of $606,000 is the same as the FY 2000-2001 cost. 
According to Mr. Mikhael Hart of the Sheriffs 
Department, the cost will remain the same in FY 2001- 
2002 because the contractor will absorb cost-of-living 
increases. 



Recommendation: 



6. The Controller's supplemental questionnaire with the 
Department's responses is attached to this report. 

Approve the proposed resolution. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

84 



ATTACHMENT 
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

Page 1 of 1 

DEPARTMENT: SHERIFF 

San Francisco Pretrial Diversion Project - 
CONTRACT SERVICES: Court Diversion and Referral Services 

CONTRACT PERIOD: JULY 1. 2001 - JUNE 30. 2002 

(1) Who performed the activity/service prior to contracting out? 

Service was initially funded through Federal grant monies and service workers performed the duties. 

(2) How many City employees were laid off as a result of contracting out? 
None 

(3) Explain the disposition of employees if they were not laid off. 
(Not applicable) 

(4) What percentage of City employees' time is spent of services to be contracted out? 
None 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

Services have been provided via contract since 1977. It is likely that the Sheriffs Department will 
continue to contract them out. 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent year? 
These services were first certified through Proposition J in Fiscal Year 1977-78. They have been certified 
each subsequent fiscal year. 

(7) How will the services meet the goals of your MBE/WBE Action Plan? 

Because a non-profit organization provides the services, the MBE/WBE Plan is not affected. 

(8) Does the proposed contractor provide health insurance for its employees? 
Yes 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits provided 
to employees with domestic partners? If not, how does the proposed contractor comply with the Domestic 
Partners ordinance? 

The contractor offers the same benefits to employees with spouses as those with registered domestic 
partners in full compliance with the ordinance. 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 
Yes 

Department Representative: JEAN MARIANI. Chief Financial Officer 

Telephone Number. (415) 554-4316 



85 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 15 -File 01-0820 



Department: 
Item: 



Services to be 
Performed: 

Description: 



Sheriff 

Resolution approving the Controller's certification that 
the Own Recognizance Services for arrestees in the City 
and County of San Francisco can continue to be 
practically performed by a private contractor at a lower 
cost for the year commencing July 1, 2001, than if the 
work were performed by City employees. 



Own Recognizance Services 

Charter Section 10.104 provides that the City may 
contract with private firms for services which had been 
performed by City employees if the Controller certifies, 
and the Board of Supervisors concurs, that such services 
can in fact be performed by private firms at a lower cost 
than similar work services performed by City employees. 

The Controller has determined that contracting for the 
Own Recognizance Project for FY 2001-2002 would result 
in estimated savings as follows: 



City-Operated Service Costs 

Salaries 
Fringe Benefits 
Total 

Estimated Total Contract 
Cost 

Estimated Savings 



Lowest 

Salary 

Step 


Highest 

Salary 

Step 


$769,306 

215.145 

$984,451 


$915,902 

237.746 

$1,153,648 


797.171 


797.171 


$187,280 


$356,477 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

86 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Comments: 



1. The Own Recognizance (O.R.) Project interviews 
persons arrested on non-warrant felony charges and 
certain misdemeanors who are booked into custody and 
are not immediately bailed or cited. The interviews 
provide information for the Municipal Court to determine 
whether the person should be released on their own 
recognizance. 

2. The Sheriffs Department reports that the O.R. Project 
was first certified under Proposition J, (Charter Section 
10.104), in FY 1977-78 and has been continuously 
provided by an outside contractor since that time. 

3. The prior one-year contract with the San Francisco 
Institute for Criminal Justice-O.R Project, a non-profit 
organization that provides the O.R. Project, expires on 
June 30, 2001. The Sheriffs Department plans to enter 
into a new contract for FY 2001-2002. 



Recommendation: 



4. The Estimated Total Contract Cost used for the 
purpose of this analysis is the San Francisco Institute for 
Criminal Justice O.R. Projects' projected FY 2001-2002 
cost for the Own Recognizance Project. 

5. The Estimated Total Contract Cost of $797,171 for FY 
2001-2002 is $15,119 or about 1.9 percent more than the 
FY 2000-2001 cost of $782,052. According to Mr. Mikhael 
Hart of the Sheriffs Department, the increased cost is due 
to the combination of (a) a cost of living adjustment and 
(b) an increase in fringe benefits. 

6. The Controller's supplemental questionnaire with the 
Department's responses is attached to this report. 

Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

87 



ATTACHMENT 

CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

' Page 1 of 1 

DEPARTMENT: SHERIFF 

San Francisco Institute for Criminal Justice 
CONTRACT SERVICES: Own Recognizance fORI Project 

CONTRACT PERIOD: JULY 1. 2001 - JUNE 30. 2002 

(1) Who performed the activity/service prior to contracting out? 
Prior to contracting out, the service was not previously provided. 

(2) How many City employees were laid off as a result of contracting out? 
None 

(3) Explain the disposition of employees if they were not laid off. 
(Not applicable) 

(4) What percentage of City employees' time is spent of services to be contracted out? 
None 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

Services have been provided via contract since 1966. It is likely that the Sheriffs Department will 
continue to contract them out. 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent year? 
These services were first certified through Proposition J in Fiscal Year 1977-78. They have been certified 
each subsequent fiscal year. 

(7) How will the services meet the goals of your MBE/WBE Action Plan? 

Because a non-profit organization provides the services, the MBE/WBE Plan is not affected. 

(8) Does the proposed contractor provide health insurance for its employees? 
Yes 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits provided 
to employees with domestic partners? If not, how does the proposed contractor comply with the Domestic Partners 
ordinance? 

The contractor offers the same benefits to employees with spouses as those with registered domestic 
partners in full compliance with the ordinance. 

(10) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 
Yes 

Department Representative: JEAN MARIANI. Chief Financial Officer 

Telephone Number (415) 554-4316 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 16 -File 01-0821 



Department: 
Item: 



Services to be 
Performed: 

Description: 



Sheriff 

Resolution approving the Controller's certification that 
County Jail Food Service Management operations for the 
City and County of San Francisco can continue to be 
practically be performed by a private contractor at a lower 
cost for the year commencing July 1, 2001, than if the 
work were performed by City employees. 



County Jail Food Service Management 

Charter Section 10.104 provides that the City may 
contract with private firms for services which had been 
performed by City employees if. the Controller certifies, 
and the Board of Supervisors concurs, that such services 
can in fact be performed by private firms at a lower cost 
than similar work services performed by City employees. 

The Controller has determined that contracting for Jail 
Food Service Management services for FY 2001-2002 
would result in estimated savings as follows: 



City-Operated Service Costs 

Salaries 
Fringe Benefits 
Total 



Estimated 
Cost 



Estimated Savings 



Total Contract 



Lowest 

Salary 

Step 


Highest 

Salary 

Step 


$1,417,220 

419,975 

$1,837,195 


$1,678,040 

460.662 

$2,138,702 


1.465.731 


1.465.731 


$371,464 


$672,971 



Comments: 



1. Jail Food Service Management operations consist of 
the administrative oversight and provision of meals at six 
County jails that provide housing to inmates. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

89 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

2. Jail Food Service Management services were first 
certified, as required under Proposition J (Charter Section 
10.104), in 1980 and have been continuously provided by 
an outside contractor since that time. 

3. Mr. Mikhael Hart of the Sheriffs Department advises 
that the current contract with Aramark Correctional 
Services expired April 30, 2001 but the Purchasing 
Department has extended it through June 30, 2001. 

4. The Estimated Total Contract Cost used for the 
purpose of this analysis is based on the current 
contractor's, Aramark Correctional Services, projected FY 
2001-2002 costs to provide County Jail Food Services 
Management operations. However, Mr. Hart of the 
Sheriffs Department advises that the Purchasing 
Department will issue a competitive bid request for these 
services in May or June of 2001. Mr. Hart advises that it 
is anticipated that the current contract would be extended 
on an interim month-to-month basis into Fiscal Year 
2001-2002 until a new contract is awarded to the 
successful bidder. 

5. The Controller's supplemental questionnaire with the 
Department's responses is shown attached to this report. 

Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

90 



ATTACHMENT 
CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE page 1 

DEPARTMENT: SHERIFF 

Aramark Correctional Services — 
CONTRACT SERVICES: Food Services for Jail Inmates 

CONTRACT PERIOD: JULY 1. 2001 - JUNE 30. 2002 

(1) Who performed the activity/service prior to contracting out? 

City employees, including a Food Service Administrator, Chefs and Cook, provided this service 
prior to 1980. 

(2) How many City employees were laid off as a result of contracting out? 
None 

(3) Explain the disposition of employees if they were not laid off. 

The Food Service Administrator's position was vacant. Departments with similar classifications hired 5 
Chefs and 1 Cook. The Mayor's Office deleted the positions from the FY 1994-95 budget. 

(4) What percentage of City employees' time is spent of services to be contracted out? 
None 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing request for 
contracting out? 

These services have been contracted out since 1980. It is likely that the Sheriffs Department will 
continue to contract them out, either with Aramark, or with another vendor selected through RFP. 

(6) What was the first fiscal year for a Proposition J certification? Has it been certified for each subsequent year? 
These services were first certified through Proposition J in Fiscal Year 1980-81. They have been certified 
each subsequent fiscal year. 

(7) How will the services meet the goals of your MBE/WBE Action Plan? 

The Department will continue to request a waiver for these services, which are highly specialized and 
were competitively bid. The Purchasing Department plans to re-bid these services during Fiscal Year 
2001/02. 

(8) Does the proposed contractor provide health insurance for its employees? 
Yes 

(9) Does the proposed contractor provide benefits to employees with spouses? If so, are the same benefits provided 
to employees with domestic partners? If not, how does the proposed contractor comply with the Domestic Partners 
ordinance? 

Aramark provides benefits to employees with spouses. The Department and Aramark will resubmit the 
required Contract-by-Contract renewal request to the Human Rights Commission to confirm Aramark's 
continued local compliance with the ordinance. 

(1 0) Does the proposed contractor pay meet the provisions of the Minimum Compensation Ordinance? 
Yes. 

Department Representative: JEAN MARTANI. Chief Financial Officer 

Telephone Number: (415) 554-4316 



91 



Memo to Finance 

May 16 , 2001 Finance Committee Meeting 

Item 17 -File 01-0824 



Department: 
Item: 



Amount: 



Source of funds: 



Description: 



Port of San Francisco 

File 01-0824 

Release of reserved funds in the amount of $472,390 for 
the purchase of a new Computerized Facilities 
Maintenance Management System for the Port's 
Maintenance Division. 

$472,390 

$7,550,000 in loan proceeds obtained from the Canadian 
Imperial Bank of Commerce originally appropriated by 
the Board of Supervisors (File No. 173-97-3). 

In June of 1995, the Board of Supervisors approved a 
Supplemental Appropriation allocating $7,550,000 from 
loan proceeds obtained from the Canadian Imperial Bank 
of Commerce for a capital project to relocate the Port's 
Maintenance Facility from Pier 46B to Pier 50. The Board 
of Supervisors reserved $6,052,714 of these funds pending 
identification of a contractor and submission of budget 
details. These funds were originally appropriated to fund 
improvements related to the relocation of the Port 
Maintenance Facility due to the construction of Pacific 
Bell Ballpark at China Basin. On four occasions, the 
Board of Supervisors has released portions of the reserved 
funds for various projects, as shown below: 



Description 


Date Amount 


Funds Initially Placed on Reserve 


June, 1997 


86,025,714 




Reserve Funds Released 


Date 


Amount 


Roof repairs, design and engineering 
services 


December, 
1997 


$2,353,464 


Site improvements at Pier 50 


January, 1998 


1,482,800 


Construction work on parking 
shelters at Pier 50 


July, 1999 


565,870 


Install new 8 inch firemain and 

engineering services for sprinkler 
system plan Pier 50 


September, 
1999 


25,500 


Total Release from 
Reserve 




$4,427,634 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



92 



Memo to Finance 

May 16 , 2001 Finance Committee Meeting 



According to Ms. Imani Haygood of the Port, the subject 
$472,390 in reserved funds would be used to purchase a 
new Computerized Facilities Maintenance Management 
System for the Port's Maintenance Division. According to 
Ms. Haygood, this system would enable the Port to more 
effectively manage its maintenance schedules, chart work 
flow and allow Port staff to analyze workload data. 

According to Ms. Haygood, the Port Commission directed 
Port staff to issue a Request for Proposal (RFP) on 
December 20, 2000 to software vendors to provide the 
Port with the necessary software and consulting services. 

According to Ms Haygood, the RFP was distributed to 
approximately 15 vendors and six vendors submitted 
proposals. Upon review of the proposals by an evaluation 
team 1 , the three vendors considered the most qualified 
were invited to formally present their proposals and 
demonstrate their software, according to Ms. Stephanie 
Downs of the Port. A list of the six vendors responding to 
the RFP is as follows: 



Vendor 


Product 


Score 2 


Wonderware Corporation 


Avantis 


2,843 


PSDI 


Maximo 


2,771 


Prism Computer Corporation 


Famis 


2,500 


Datastream Systems 


MP5 


Not invited to present 


Sussex Business Systems 


Sussex Work Management 
System 


Not invited to present 


CSI-Maximus 


Facility Focus 


Not invited to present 



The evaluation team selected the Avantis software 
product from Wonderware Corporation as the most 
responsive and qualified bidder under the criteria set 
forth in the RFP. A summary budget for this project is 



1 The evaluation team consisted of representatives from the Port's Maintenance, Real Estate, 
Maritime, Accounting and Information Systems Divisions. 

2 The Port used the following weighted criteria items to evaluate the vendor submittals: 
functionality; product support from the vendor; integration, compatibility; implementation and 
migration; vendor experience; cost and corporate history and stability. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

93 



Memo to Finance 

May 16 , 2001 Finance Committee Meeting 



Comments: 



Recommendation: 



provided below. Attachment I to this report is a 
memorandum, provided by Ms. Downs of the Port 
containing additional information pertaining to the RFP 
selection process. 



Summary 


$155,450 


Software license 


Budget: 


25,140 


First Year Software Maintenance 




196,800 


Implementation Consulting 




45,000 


User Training 




$422,390 


Subtotal 




50,000 


Contingency 



$472,390 



Attachment II provided by Ms Downs contains additional 
budget details. 

1. According to Ms. Haygood, the Port's current Faculties 
Maintenance system is an antiquated system that is 
difficult to maintain. Ms. Haygood states that the Port's 
primary goals in implementing the new system are as 
follows: 

a.) Improved Customer Support and responsiveness 
to the needs of current tenants (and prospective 
tenants). 

b.) Improved Faculties Maintenance Business 
Process 

c.) Improved Availability and Access to Facilities 
Maintenance Data 

d.) Improved Organization of Facilities 
Management Data 

e.) Improved Technical Support 

f.) Reduced Reliance on Custom Applications 

2. According to Ms. Downs, the Port anticipates that the 
new system will be operational in four to five months. 

Approve the request to release reserved funds in the 
amount of $472,390. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

94 




Attachment I 
Page 1 of 2 



PORT-_ 

BAN FRANC« CO 



MEMORANDUM 

May 16, 2001 

TO: Pascal St. Gerard 

Budget Analyst 

FROM: Stephanie Downs 

Finance Manager 

SUBJECT: Selection of Facility Maintenance Management System Vendor 



In February 2001 the Port received six proposals in response to an RFP to software vendors to 
provide a Facility Maintenance Management System. The six respondents and their products 
were as follows: 

Company Product 

Wonderware Avantis 

PSD I Maximo 

Prism FAMIS 

CSI Maximus Facility Focus 

Sussex Sussex Business Work Management 

Datastream mp5 

The CSI Maximus, Sussex, and Datastream proposals were deemed to be non-responsive to 
the Port's needs as outlined in the RFP by the evaluation team. The three other respondents 
were invited to provide live demonstrations of their software. 

Avantis was selected for several reasons. Most importantly, the evaluation team felt that the 
Avantis product was technologically superior to the competitors. Written in C++, the product is 
fully integrated with other Windows applications, which gives users a consistent look and feel 
from the desktop as well as leveraging their existing skills. Avantis provides a scalable 
application with a unique flexibility that can be utilized to create work requests as well as being 
an analytical tool for long-term strategic planning. 

Functionally, the Avantis product meets and exceeds the Port's requirements as stated in the 
RFP. The preventive maintenance, scheduling, and inventory tracking components give the 
Port the ability to effectively control maintenance costs and increase the productive utilization of 
personnel. The package offers workflow automation, bar coding, scanning, and PDA support. 
Other vendor proposals offered some of these features but only Avantis offered ajl of them with 
technological innovation and simplicity of use. 

The implementation methodology proposed by Avantis was systematic and thorough. The 
process includes site assessment, business process flows designed and built, best practice 
workshops, and an installed database that is pre-built to our specific configuration with tailored 
drop down lists, views, and sample data. With over 800 installed clients, Avantis brings a team 
with strong business analysis expertise as well as thorough product knowledge to successfully 
plan and manage the implementation process. qc . 



i 



PORT-— 

«!<>cN FRANCISCO 



Attachment I 
Page 2 of 2 



Finally, the system provides for easy access to information. Employing user-defined views 
called cabinets, users are able to retrieve and analyze the data to produce custom designed 
reports and inquires. 

If you have any further questions about this project, please call me at 274-0442. 



CT OF SAN FRANCISCO 



TEL 415 274 0400 



96 



FAX 415 274 0528 



TTY 415 274 0587 

— _JfliEB-sfDOrt.com 



ADDRESS Picrl 

San Francisco. CA 94111 



TO: 



FROM: 



Pascal St. Gerard 
Budget Analyst 

Stephanie Downs 
Finance Manager 




Attachment II 



PORTs^_ 



MEMORANDUM 

May 17, 2001 



SUBJECT: Budget for Facility Maintenance Management System Vendor 



Pursuant to your request, the breakdown of the budget for the Facility Maintenance 
Management system is as follows: 



Software license = 20 users x $7,772.50 
First Year Software Maintenance 1 

Implementation: 

Project Management 208 hr. x $225/hr. 46,800 

Technical Consutlants 1 00 hr. x $1 87.50/hr. 150.000 

Total Implementation 

User Training: 

Training Materials $1 50 x 20 users 3,000 

Training Preparation 80 hr. x $1 87.50/hr. 1 5,000 

End User Training 144 hr. x $1 87.50/hr. 27.000 

Total User Training 

Subtotal 

Contingency for unforseen issues 

Total Project Bidget 

If you have further questions, please call me at 274-0442. 



$155,450 
25,140 



196,800 



45.000 
$422,390 

50.000 
$472.390 



PORT OF SAN FRANCISCO 



TEL 415 274 0400 



97 



FAX 415 274 0528 



TTY 415 274 0587 
WEB sfoort.com 



ADDRESS Pierl 

San Francisco. CA 94111 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 18 - File 01-0827 



Department: 
Item: 



Lessor: 
Lessee: 

No. of Square Feet: 



Amount Payable by 
Jelly's to the Port 
Under the Existing 
Lease: 



Port Commission 

Resolution approving a new lease agreement with Corzac, 
Inc., doing business as Jelly's — A Dance Cafe, and the 
City and County of San Francisco operating by and 
through the San Francisco Port Commission for 
restaurant space at Pier 50. 

City and County of San Francisco 

Corzac, Inc. doing business as (dba) Jelly's — A Dance 
Cafe 

Approximately 10,212 square feet, including 3,388 square 
feet of indoor restaurant space and 6,824 square feet of 
outdoor deck and eight parking spaces, located at Pier 50. 



According to Mr. Mark Lozovoy of the Port, in December 
of 1993, Corzac, Inc., dba Jelly's - A Dance Cafe (the 
lessee), took over the remaining two and a half years of an 
existing three-year lease between the Port and Olive Oil's, 
a restaurant, for 4,520 square feet of space at Pier 50 (see 
Comment No. 3). This 4,520 square feet of leased space 
includes 3,388 square feet of indoor restaurant space and 
1,132 square feet for an outdoor deck. Since the expiration 
of this three-year lease in July of 1996, Jelly's has 
maintained occupancy of the 4,520 square feet of space on 
a month-to-month holdover of the original lease. Under 
the existing month-to-month lease for approximately 
4,520 square feet between the Port and Jelly's, rent 
payable by Jelly's to the Port is the greater of: (a) 
$2,806.17 per month (approximately $0.62 per square foot 
per month), or $33,674 per year (approximately $7.45 per 
square foot per year) or (b) seven percent of gross receipts. 
Mr. Lozovoy reports that Jelly's paid $47,140 in total rent 
in Calendar Year (CY) 2000 (seven percent of gross 
receipts of $673,429). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

98 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Amount Payable by 
Jelly's to the Port 
Under the Proposed 
Lease: 



Under the proposed ten-year lease agreement, Jelly's 
would lease an additional 5,692 square feet of outdoor 
space immediately in front of the American cuisine 
restaurant as well as outdoor space for a proposed patio to 
be located near the restaurant's entrance, for a total of 
10,212 square feet (4,520 square feet of space under the 
existing month-to-month lease plus 5,692 square feet 
under the proposed new lease) and a total of 8 parking 
spaces. Jelly's would be required to pay to the Port base 
rent in the amount of $2,806.17 per month while the 
tenant improvements are being constructed but this 
construction period should not exceed 270 days, or 
approximately 9 months. The monthly base rent paid 
during the construction period of $2,806.17 is the same 
amount of monthly base rent currently paid by Jelly's 
under the existing month-to-month lease. During the 270- 
day construction period, Jelly's would not be required to 
pay the Port a percentage of gross receipts (see Comment 
No. 2). Mr. Lozovoy estimates that if Jelly's were to pay 
percentage rent during the nine month period, an 
estimated $35,355 would be paid to the Port instead of the 
base rent of $25,256 which will be paid to the Port during 
the construction period, a difference of $10,099. Mr. 
Lozovoy reports that Jelly's will not be in operation 
during the construction period. The restaurant will be 
closed during the period of construction, anticipated to be 
January 31, 2002 through September 30, 2002, according 
to Mr. Lozovoy. Operation of the restaurant is anticipated 
to begin on October 1, 2002, according to Mr. Lozovoy. 

At the end of the construction period on the 271 st day of 
the subject lease period, rent would be adjusted to the 
greater of (a) $5,000 per month (an increase of 78 percent 
from $2,806.17 per month), or $60,000 per year, or (b) the 
total of 7 percent for restaurant food and bar sales, plus 9 
percent for take-out food sales, plus 9 percent for retail 
sales. Mr. Lozovoy estimates that annual rent in the first 
year of the renovated restaurant's operation, CY 2003, 
based on a percentage of gross receipts could be $60,969 
(see Attachment I). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

99 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



According to Mr. Lozovoy, there would be no rent 
adjustment on the first and second anniversary of the 
commencement date of the proposed new lease because, in 
lieu of an annual Consumer Price Index (CPI) increase, 
there will be a fixed increase of 12 percent on the third 
anniversary of the lease. On the third anniversary of the 
lease, rent would be adjusted to the greater of (a) $5,600 
per month (an increase of 12 percent from $5,000 per 
month), or $67,200 per year, or (b) the total of 7 percent 
for restaurant food and bar sales, plus 9 percent for take- 
out food sales, plus 9 percent for retail sales. Rent would 
be adjusted on the fourth anniversary of the 
commencement date by the annual percentage increase in 
the CPI. 

On the fifth anniversary of the commencement date, the 
base rent would be adjusted to equal the then current fair 
market value of such property. The Port, using a market 
comparison approach, would determine the fair market 
value adjustment after five years. The adjustment would 
take into account: (a) land values in the general vicinity of 
the waterfront, (b) the location and size of the premises 
covered by leases of comparable space, and (c) the 
duration of the comparable leases. Jelly's would have the 
opportunity to dispute the prevailing market rate 
determined by the Port, as provided for in the proposed 
lease. If an agreement between the Port and Jelly's on the 
prevailing market rate cannot be reached, then 
unresolved disputes between the two parties would be 
resolved by the joint hiring of an independent appraiser. 
The annual base rent on or after the adjustment date 
cannot be less than the annual base rent in effect 
immediately prior to the adjustment date. Subsequent 
annual increases in the rent for the remaining five years 
of the 10 year lease will be made based on the annual 
percentage increase in the CPI. 

Purpose of Lease: 10-year lease of approximately 10,212 square feet of Port 

property for restaurant space at Pier 50. 

Term of Lease: The proposed lease would commence when Jelly's has 

obtained the necessary building permits, anticipated to 
occur on or before January 31, 2002, and would expire 10 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

100 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Right of Renewal: 
Description: 



years thereafter (approximately January of 2012 - see 
Comment No. 1). 

None. 

The proposed resolution would approve a 10-year lease, 
negotiated on a sole source basis by the Port with the 
existing tenant of Pier 50, Jelly's - A Dance Cafe. Mr. 
Lozovoy states that the proposed 10-year lease was 
negotiated on a sole source basis with Jelly's in 
accordance with the provisions of the Port's 1993 Policy 
for Leasing Retail Business Sites. This Policy states that 
normal requirements for competitive bidding of Port 
property may be waived in cases where the Port 
Commission determines that the existing retail tenant (1) 
is a tenant in good standing; (2) is committed to making a 
significant capital investment supported by a sound 
business plan; (3) the tenant is the best economic tenant 
available, based on (a) sales and revenues to the Port, (b) 
rent'comparables, and (c) a stable growth pattern; and (4) 
the tenant has a good record of affirmative action and 
nondiscrimination. According to Mr. Lozovoy, the Port 
Commission determined that Jelly's meets all of the 
criteria for the award of a sole source lease that were 
established in the Port's Policy for Leasing of Retail 
Business Sites (see Comment No. 5). 



Required Improvements 
Under Proposed 
Lease: 



Comments: 



Under the terms of the proposed lease, Jelly's would be 
required to complete, at their own expense, improvements 
to the subject site, including the addition of two 
bathrooms, repair of Jelly's outdoor deck, electrical and 
plumbing improvements, and various other improvements 
including painting and general refurbishing at an 
estimated cost of $270,000 (see Attachment II). This work 
must be completed within the first 270 days, or nine 
months, of the proposed new lease, anticipated to 
commence on January 31, 2002. Under the terms of the 
lease, the improvements to the subject property would 
revert to the Port at the expiration of the Lease. 

1. The term of this lease would commence when Jelly's 
has obtained building permits from (1) the Bay 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

101 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 



Conservation and Development Commission (BCDC) and 
(2) the Port, which, according to the proposed lease, would 
be on or before January 31, 2002. Mr. Lozovoy advises 
that the proposed lease would not become effective if 
Jelly's fails to obtain both of the specified permits by 
January 31, 2002. 

2. According to Mr. Lozovoy, no percentage rent will be 
payable to the Port until the improvements are completed 
(within 270 days) because Jelly's will not be open for 
business during the 9-month construction period, 
anticipated to be January 31, 2002 through September 30, 
2002. Mr. Lozovoy advises that during- the 9-month 
construction period, Jelly's will only pay to the Port 
monthly base rent in the amount of $2,806.17, or $25,256. 

3. Mr. Lozovoy reports that the proposed base monthly 
rent of $5,000 effective on the 271 st day of the proposed 
lease represents fair market value. 

4. According to Ms. Lisa Clay of the City Attorney's Office, 
the Olive Oil's Restaurant was able to transfer their lease 
to Jelly's in December of 1993 because, according to the 
lease agreement, the lease could be assigned by the 
existing tenant to a new tenant, with the consent of the 
Port. Jelly's assumed all the obligations of the existing 
tenant under the prior lease. Such assignment was not 
subject to Board of Supervisors approval, according to Ms. 
Clay. 

Ms. Clay reports that Jelly's has occupied the 4,520 
square feet of space at Pier 50 for the past approximately 
4 years and 11 months on a month-to-month holdover of 
the original lease that expired in July of 1996. When 
Jelly's original 3-year lease expired in July of 1996, 
according to Mr. Lozovoy, Jelly's was not prepared to 
commit to making a significant capital investment in the 
restaurant, which is one of the provisions of the Port's 
1993 Policy for Leasing Retail Space for an existing retail 
tenant tc enter into a long-term lease with the Port. Ms. 
Clay advises that there is no maximum length of time 
that a retail tenant is able to occupy Port space on a 
month-to-month basis. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

102 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

According to Ms. Clay, Jelly's month-to-month tenancy 
was not subject to Board of Supervisors approval because 
anticipated revenue during the one-month term of the 
lease did not exceed $1 million. The original lease with 
Olive Oil's was not subject to approval by the Board of 
Supervisors because it did not meet the requirement of 
Charter Section 9.118 of having anticipated revenue of 
more than $1 million or having a term in excess of 10 
years. Mr. Lozovoy advises that the proposed lease is 
subject to Board of Supervisors approval because this 
lease is for a 10-year period and the total revenues over 
the 10-year period may exceed $1 million. 

5. The Port's Policy for Leasing of Retail Business Sites 
adopted by the Port Commission in April of 1993 
established that, in order to obtain a long-term lease 
through direct negotiation (i.e. without a competitive bid), 
existing businesses would, among other requirements 
previously noted, have to make a significant investment 
in leasehold improvements. Mr. Lozovoy reports that 
Jelly's has submitted a business plan to the Port, and has 
made an investment commitment to leasehold 
improvements. However, because the proposed lease has 
been negotiated without a competitive bid process, the 
Budget Analyst considers approval to be a policy matter 
for the Board of Supervisors. 

6. Attachment I, provided by the Port, provides estimates 
on projected rent to the Port during CY 2002 through 
2006. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

103 



Projected Rent to Port 
Jelly's - A Dance Cafe 



Attachment I 



Year 







Gross 


Percentage 




Percentage 




Base 




Total Rent 






Sales 


Rate 






Rent 




Rent 




to Port 


2002 


S 


197,950.00 




0.07 


$ 


13,856.50 


$ 


40,255.00 


$ 


40,255.00 


2003 


S 


870,983.00 




0.07 


$ 


60,968.81 


S 


60,000.00 


$ 


60,968.81 


2004 


S 


948,080.00 




0.07 


$ 


66,365.60 


$ 


60,000.00 


s 


66,365.60 


2005 


$ 


986,003.00 




0.07 


s 


69,020.21 


s 


67,000.00 


s 


69,02021 


2006 


$ 


1,025,443.00 




0.07 


s 


71,781.01 


$ 


67,000.00 


$ 


71,781.01 



NOTES: 

Total rent to Port in first year (2002) is based on: 9 months at $2,806.1 7 (Construction Rent) and 3 months 
at $5,000.00 (Base Rent) 



Source: Port Commission 



104 



Attachment II 



Leasehold Improvements 

Exterior building addition for 2 accessible bathrooms $100,000 

Exterior accessible entries to areas of remodeling 15,000 

Exterior railing system 19,000 

Exterior asphalt repair 8,000 

Exterior paint 8,000 

Exterior Landscaping 8,000 

Exterior deck and benches 18,000 

Exterior awning 6,000 

Interior electrial upgrade 23,000 

Interior plumbing upgrade 20,000 

Interior painting 5,000 

Interior dining floor and stage 15,000 

Interior bar floor 3,000 

Interior back bar 6,000 

Interior patio floor 3,000 

Interior stage curtain and window coverings 2,000 

Interior light fixtures 6,000 

Interior decoration 5,000 

TOTAL COST OF LEASEHOLD IMPROVMENTS $270,000. 



Source: Port Commission 



105 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Item 19 - File 01-0830 



Department: 
Item: 

Amount: 
Source of funds: 

Description: 



Port of San Francisco 

Release of reserved funds in the amount of $926,380 for 
the Pier 34 Demolition Project. 

$926,380 

$7,550,000 in loan proceeds obtained from the Canadian 
Imperial Bank of Commerce (originally appropriated by 
the Board of Supervisors (File No. 173-97-3). 

In June of 1995, the Board of Supervisors approved a 
Supplemental Appropriation allocating $7,550,000 from 
loan proceeds obtained from the Canadian Imperial Bank 
of Commerce for a capital project to relocate the Port's 
Maintenance Facility from Pier 46B to Pier 50. The Board 
of Supervisors reserved $6,052,714 of these funds pending 
identification of a contractor and submission of budget 
details. These funds were originally appropriated to fund 
improvements related to the relocation of the Port 
Maintenance Facility due to the construction of Pacific 
Bell Ballpark at China Basin. On four occasions, the 
Board of Supervisors has released portions of the reserved 
funds for various projects, as shown below: 



Description 


Date 


Amount 


Funds Initially Placed on Reserve 


June, 1997 


$6,025,714 




Reserve Funds Released 


Date 


Amount 


Roof repairs, design and engineering 
services 


December, 
1997 


$2,353,464 


Site improvements at Pier 50 


January, 1998 


1,482,800 


Construction work on parking shelters 
at Pier 50 


July, 1999 


565,870 


Install a new 8 inch Firemain 
engineering services for sprinkler 
system plan at Pier 50 


September, 
1999 


25,500 


Total Release from 
Reserve 




$4,427,634 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

106 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

According to Ms. Imani Haygood of the Port, the subject 
$926,380 in reserved funds would be used to complete the 
demolition of Pier 34. The Port relocated their 
maintenance facility in October 1997 from Pier 46B to 
temporary facilities at Pier 50D. The subject $926,380 
was previously appropriated to fund improvements 
related to the relocation of the Port Maintenance Facility 
from Pier 46B to Pier 50. The Port was required to 
remove Pier 34 to accommodate a future waterfront public 
access project as part of the Pacific Bell Ballpark Project 
as approved by the Bay Conservation and Development 
Commission (BCDC). The Attachment to this report is a 
memorandum from Ms. Stephanie Downs, of the Port, 
which provides additional information regarding the 
subject Pier 34 demolition project. 

Budget 



$130,000 


Mobilization 


497,000 


Demolition 


160,618 


Disposal 


60.000 


Construction mana] 


$847,618 


Subtotal 


78,762 


Contingency (9.3%) 


$926,380 





According to Ms. Haygood the Port Commission directed 
Port staff to advertise for bids for the "Pier 34 Demolition 
Project" on December 13, 2000. Port staff received 5 bids 
for this project. On March 26 th the Port Commission 
rejected all of the submitted bids. According to Ms. 
Downs, all five bids were rejected because the lowest bid 
did not meet bid specifications and the next lowest bid 
was significantly higher than the low bid. 

Under a second invitation to bid response, on April 11, 
2001 five bids were received including the low bid of 
$787,618 from Zaccor Companies. The second low bidder, 
Peak Engineering, filed a bid protest arguing that the 
Zaccor Companies' bid did not meet the bid specification 
and the Human Rights Commission (HRC) subcontracting 
goals. The bid protest was reviewed by the City 
Attorney's Office and HRC and found the bid protest to be 
without merit. A summary table of the bids received and 
the bid amounts are shown on the table below. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

107 



Memo to Finance Committee 

May 23, 2001 Finance Committee Meeting 

Bid Summary Table 





Zaccor 

Companies 


Peak 

Engineering 

Inc 


Ferma 
Corporation 


Granite 

Excavation & 
Demolition 


Seaworks Inc. 


Mobilization 


5130,000 


560,000 


865,000 


$104,131 


$92,500 


Demolition 


497,000 


974,000 


1,140,000 


1,110,800 


470,800 


Disposal 


160,618 


150,000 


134,000 


386,028 


999,000 


Total 
Base Bid 


$787,618 


$1,184,000 


$1,339,000 


$1,600,959 


$1,562,300 



Comment: 



Recommendation: 



According to Ms. Downs, the demolition of Pier 34 is 
anticipated to commence in June 2001 and take 
approximately 150 days to complete. In addition, the Port 
will make use of a Resident Engineer Architect Associate 
II (Classification No. 5266) obtained from the Bureau of 
Architecture to provide construction management 
services. Ms. Downs states that the Port has allocated an 
estimated $60,000 of the subject funds for this purpose, 
based on 1,090 hours at an hourly rate of $55 per hour. 

Approve the request to release reserved funds in the 
amount of $926,380. 




[arvey M. Rose 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

108 




PORT^_ 



MEMORANDUM 



May 16, 2001 

TO: Pascal St. Gerard 

Budget Analyst 

FROM: Stephanie Downs 
Finance Manager 

SUBJECT: Release of Reserve of Loan Proceeds for Pier 34 Removal 



In July 1997 the Port entered into a $12,000,000 loan agreement to cover anticipated 
Port expenses associated with construction of Pacific Bell Ballpark. The primary 
purpose of the loan was to facilitate the site consolidation and clearance of Port 
property. Use of the loan proceeds include the purchase of a 3.5 acre parcel 
contiguous to Pier 46 for site consolidation, relocation of the Port's maintenance facility 
at Pier46B, construction of a new maintenance facility at Pier 50D, relocation of other 
commercial tenants located on the site and construction of improvements to other Port 
facilities associated with the tenant relocation. 

In order for the project to go forward, in November 1997 the Port entered into an 
agreement with Save San Francisco Bay Association ("Save the Bay") who had 
objected to the issuance of a Bay Conservation and Development Commission 
("BCDC") permit for construction of the Ballpark project. One of the requirements of the 
agreement with Save the Bay was the removal of Pier 34 within one year of the opening 
of the Ballpark. This was further subject to the successful negotiation between the Port, 
Save the Bay and BCDC of amendments to the San Francisco 
Waterfront Special Area Plan. 

On July 20, 2000 the Special Area Plan amendments were adopted, and the date of the 
required Pier 34 demolition was moved to one year following adoption of the 
amendments. Due to the delay of the bid award caused by a bid protest, construction is 
anticipated to begin in June 2001 and demolition will be complete in November 2001. 
The Port has kept BCDC informed as to the reasons for the delay. 



If you have any further questions, please call me at 274-0442. 



PORT OF SAN FRANCISCO 



TEL 4152740400 



TTY 415 274 0587 

WEB sfaort.com 



ADDRESS PieM 

San Francisco. CA 94111 



1 nq 




City and County of San Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 



Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, May 30, 2001 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:08 a.m. 

010699 [Treasure Island Fire Training Sublease] 
Supervisor Daly 

Resolution approving a sublease between the City and County of San Francisco (The "City") and the Treasure 
Island Development Authority (The "Authority") for property on Treasure Island generally bounded by 8th 
Street to the south, 10th Street to the north, M Street to the west, and N Street to the east for use as a fire 
training facility at an annual rent of $1,740,000 per year. 

(Fiscal impact; District 6.) 

4/16/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/23/01, CONTINUED. Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 

Continued to 5/30/01. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Chief Paul Tabacco, Fire Department: 
Assistant Deputy Chief Joanne Hayes-White, Director of Training, Fire Department; Christine Ragan. Chief 
Financial Officer, Fire Department; Annemarie Conroy, Executive Director, Treasure Island Development 
Authority; Supervisor Daly. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010843 [Appropriation, Gang Outreach and Youth Violence Prevention Programl 
Supervisors Ammiano, Maxwell 

Ordinance appropriating $200,000 of the General Fund Reserve to fund Gang Outreach and Youth Violence 
Prevention Program in the Mission and Bayview Hunters Point neighborhoods through the Mayor's Office of 
Criminal Justice for fiscal year 2000-01. 

(Fiscal impact.) 

5/7/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Supennsor Ammiano; Supervisor Sandoval; Kan Wcmstein. Mayor's 

Criminal Justice Council; Harvey Rose, Budget Analyst; Matthew llymel. Chief Deputy Controller; Captain 

Hetrich, Police Department; Theodore Lakey, Deputy City Attorney. 

Amendment of the Whole prepared in Committee 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 



City and County of San Francisco 



Prime J at 2:28 PM on 3 3 04 



Finance Committee 



Meeting Minutes 



May 30, 2001 



Ordinance appropriating $200,000 of the General Fund Reserve to fund Gang Outreach and Youth Violence 
Prevention Program in areas of the City with concentrated amounts of serious and violent youth crimes, 
including Supervisorial Districts 5, 6, 9, 10 and 11, through the Mayor's Office of Criminal Justice for fiscal 
year 2000-01. 

(Fiscal impact.) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010682 [AB 1419, Land Transfer, Transbay Terminal] 
Supervisor Ammiano 

Resolution supporting AB 1419 (Aroner), requiring Caltrans to transfer land to the San Francisco 

Redevelopment Agency for the implementation of the Transbay Terminal Replacement Project; mandating that 

Caltrans lease to the Transbay Terminal Joint Powers Authority certain parcels of land for bus storage; and 

requiring the San Francisco Redevelopment Agency to dedicate to the Transbay Terminal project any tax 

increment funds and net proceeds from the disposition of state-owned land. 

4/16/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Kawa, Mayor's Office; Alicia Bert, 

Mayor's Office. 

Amended on page 1, line 3, after "(Aroner), " and on page 2, line 16, after "AB 1491, " by adding "without 

Dutra amendment. " 

AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 
Resolution supporting AB 1419 (Aroner), without Dutra amendment, requiring Caltrans to transfer land to the 
San Francisco Redevelopment Agency for the implementation of the Transbay Terminal Replacement Project; 
mandating that Caltrans lease to the Transbay Terminal Joint Powers Authority certain parcels of land for bus 
storage; and requiring the San Francisco Redevelopment Agency to dedicate to the Transbay Terminal project 
any tax increment funds and net proceeds from the disposition of state-owned land. 
RECOMMENDED AS AMENDED. 



010863 [Release of Reserved Funds, Sunset Infrastructure] 
Supervisor Yee 

Motion releasing $500,000 placed on Board of Supervisors Reserve for Sunset Infrastructure. 

(Fiscal impact.) 

5/7/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Supervisor Yee; Harvey Rose, Budget Analyst; Gary Hoy, Capital Program 

Manager, Recreation and Park Department; Nelson Wong, Department of Public Works; Theodore Lakey, 

Deputy City Attorney; Shawn Drew; Marianna. 

Amended on lines 3 and 16 by replacing "$500,000" with "$475,000. " 

AMENDED. 

Motion releasing $475,000 placed on Board of Supervisors Reserve for Sunset Infrastructure. 

(Fiscal impact.) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:28 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



May 30, 2001 



010549 [Appropriation, funding for uniform firefighters and investigators overtime] 

Ordinance appropriating $2,160,476 from the Airport and various departmental revenues as well as 
reallocating $1,200,000 in Police department appropriations to the Fire department to fund the cost of uniform 
firefighters and investigators salaries and overtime in the Fire Department for fiscal year 2000-01. (Controller) 

(Fiscal impact.) 

3/28/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/16/01, AMENDED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Chief Tobacco, Fire Department; Jim Corrigan; 

Edward Harrington, Controller. 

Amended on page 1 as follows: On lines 2 and 25, by replacing "52,991,267" with "S2, 160,476"; on line 11, by replacing "51,626,267" 

with "5795,476"; and on line 22, by replacing "52,486,267" with "51,655,476." 

Continued to 5/23/01. 

5/16/01, CONTINUED AS AMENDED. 

5/23/01, AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. Heard in Committee. Speakers: Harvey Rose, 

Budget Analyst; Jim Corrigan, Edward Harrington, Controller. 

Continued to 5/30/01. 

5/23/01, CONTINUED AS AMENDED. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Annemarie Conroy, Executive Director, 

Treasure Island Development Authority; Captain Hetrich, Police Department; Matthew Hymel, Chief Deputy 

Controller. 

Amendment of the Whole prepared in Committee. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance appropriating $2,160,476 from the Airport and various departmental revenues to fund the cost of 

uniform firefighters and investigators salaries and overtime in the Fire Department for fiscal year 2000-01. 

(Controller) 

(Fiscal impact.) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes; 3 - Leno, Peskin, Gonzalez 



010815 [Lease of Property] 

Resolution approving a new lease of real property located at 1667 Market Street on behalf of Administrative 
Services, for the Department of Elections. (Real Estate Department) 

(Fiscal impact; District 6) 

5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/7/01, SUBSTITUTED. Real Estate Department submitted a substitute resolution bearing new title. 

5/7/01, ASSIGNED to Finance Committee. 

5/23/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Legnilto. Real Estate Division, 

Department of Administrative Services; Bill Lee, City Administrator; Mary Hobson, OfTice of City Architect; Chris Bowman. Citizens 

Advisory Committee on Elections. 

Continued to 5/30/01. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Legnitto, Real Estate Division. 
Administrative Services Department. 
TABLED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Primed ai 2:21PM ■ ■« I 3 iu 



Finance Committee 



Meeting Minutes 



May 30, 2001 



010836 [Reserved Funds, Department of Elections] 

Hearing to consider release of reserved funds, Department of Elections, (File 010249, Ordinance No. 65-01), in 
the amount of $800,000 to fund equipment purchase and 5251,000 for non-personal services. (Administrative 
Services Department) 

5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Ara Minasian, Department of Administrative 
Services; Theresa Alvarez, Deputy City Attorney; Steve Kawa, Mayor's Office; Ryan Brooks, Director, 
Administrative Services Department. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010818 [Credit Card Acceptance Cost Reduction] 
Supervisor Newsom 

Resolution urging the Treasurer of the City and County of San Francisco to explore methods of reducing the 

costs associated with the City's acceptance of credit cards. (Treasurer-Tax Collector) 

5/2/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Leal, Treasurer. 

RECOMMENDED by the following vote: 

Ayes: 2 - Leno, Gonzalez 

Absent: 1 - Peskin 



010835 [Lease of Property for DPH Mental Health] 

Resolution authorizing a new lease of real property currently occupied by the City under the terms of an earlier 
lease at 1380 Howard Street, San Francisco, for a term of five years and one month, commencing June 1, 2001 
at an initial monthly rent of S 100,000 per month for the Mental Health Division of the Department of Public 
Health. (Real Estate Department) 

(Fiscal impact; District 6) 

5/9/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Steve Legnitto, Real Estate Division, 
Administrative Services Department. 
RECOMMENDED., by the following vote: 
Ayes: 2 - Leno, Gonzalez 

Absent: 1 - Peskin 



010866 [Official Advertising] 

Resolution designating the San Francisco Independent to be the official newspaper of the City and County of 

San Francisco for the category of non-consecutive day official advertising, for the fiscal year commencing July 

1, 2001 and ending June 30, 2002. (Purchaser) 

5/9/01 , RECEIVED AND ASSIGNED to Finance Committee. 

5/14/01, SUBSTITUTED. Purchasing Department submitted a substitute resolution bearing new title. 

5/14/01, ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Michael Ward, Assistant Director of 
Purchasing; Purchasing Department, Theodore Lakey, Deputy City Attorney; Edward Harrington, Controller. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 






City and County of San Francisco 



Printed at 2:29 PM on 3/3/04 



Finance Committee 



Meeting Minutes 



May 30, 2001 



010867 [Outreach Advertising] 

Resolution designating the China Press to be outreach newspaper of the City and County of San Francisco for 

the Chinese community, and designating El Mensajero to be outreach newspaper of the City and County of San 

Francisco for the Hispanic community, for outreach advertising for the fiscal year commencing July 1, 2001 

and ending June 30, 2002. (Purchaser) 

5/9/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/14/01, SUBSTITUTED. Purchasing Department submitted a substitute resolution bearing new title. 

5/14/01, ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Michael Ward, Assistant Director of 
Purchasing, Purchasing Department; Carmen Ruiz, owner of El Latino Newspaper; Marvin Ramirez, 
publisher of El Reportero; Jose Del Castillo, publisher and owner of El Mensajero; Clementina Garcia; 
America Soler-Everhart; Sylvia Sandoval; Pedro Morales, reporter for El Reportero; Julio Ramos; Luis 
Espinoza, Purchasing Department. 
Continued to 7/11/01. 

7/13/01, THE MEETING OF JULY 1 1 WAS CANCELLED. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010868 [Establishing Trial Parking Rates as Permanent Parking Rates for City Owned Garages and Metered 
Facilities] 

Resolution approving trial parking rates as proposed permanent parking rates at the Lombard Street Garage, the 

North Beach Garage, the Portsmouth Square Garage, the Japan Center Garages, the St. Mary's Square Garage, 

the Union Square Garage, and the Vallejo Street Garage. (Parking and Traffic Department) 

5/9/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose. Budget Analyst; Ronald Szeto, Acting Director. Parking 

Authority. 

RECOMMENDED by the following vote: 

Ayes: 2 - Leno, Peskin 

Absent: 1 - Gonzalez 



010872 [Water Rates] 

Ordinance approving revised schedule of rates to be charged by the San Francisco Public Utilities Commission 

for water service to its retail customers inside and outside the City and County of San Francisco. (Public 

Utilities Commission) 

5/9/01, RECEIVED AND ASSIGNED to Finance Committee. With direction to report back to Board June 4, 2001. 

Heard in Committee. Speakers: Har\>ey Rose. Budget Analyst; Bill Berry. Assistant General Manager, 

Finance and Administration. Public Utilities Commission. 

RECOMMENDED by the following vote: 

Ayes: 2 - Leno, Peskin 

Absent: 1 - Gonzalez 



City and County of San Francisco 



Printed al 2:29 PM on .? .? 04 



Finance Committee 



Meeting Minutes 



May 30, 2001 



010873 [Water Rates] 

Ordinance approving revised schedule of rates to be charged by the San Francisco Public Utilities Commission 

for water service to its suburban resale customers. (Public Utilities Commission) 

5/9/01 , RECEIVED AND ASSIGNED to Finance Committee. With direction to report back to Board June 4, 2001 . 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Bill Berry, Assistant General Manager, 

Finance and Administration. Public Utilities Commission. 

RECOMMENDED by the following vote: 

Ayes: 2 - Leno, Peskin 

Absent: 1 - Gonzalez 



010936 [Mayor's Summer Food Service Program] 
Mayor 

Resolution authorizing the Department of Children, Youth and Their Families to accept and expend a grant in 

the amount of $484,500 from the United States Department of Agriculture for the Mayor's Summer Food 

Service Program for children. (Mayor) 

5/16/01, RECEIVED AND ASSIGNED to Neighborhood Services and Parks Committee. 

5/24/01, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Camille Wise, Department of Children, Youth 

and Their Families; Abdalla Megahed, Advocate for the Homeless. 

Amended by adding the following "Further Resolved" clause: "FURTHER RESOL VED, That the Controller is 

hereby urged to designate the 36 temporary positions funded by the grant as 'G, ' or grant-funded, positions 

that would terminate when the subject grant expires. " 

AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Leno, Peskin 
Absent: 1 - Gonzalez 



010932 [Delivery and execution of refunding certificates of participation, Series 2001-1 and Taxable Series 
2001-2 (S.F. Courthouse and 25 Van Ness Project)] 
Mayor 

Resolution approving the execution and delivery of refunding certificates of participation to refmance, in part 
and/or in whole, certificates of participation previously executed and delivered by the City and County of San 
Francisco (the "City"); approving the form of the property and facility lease between the City and a trustee; 
approving the form of the project lease between the City and a trustee (including certain indemnities contained 
therein); authorizing the selection of a trustee; approving the form of the trust agreement between the City and a 
trustee (including certain indemnities contained therein); authorizing the selection of an escrow agent; 
approving the form of the escrow agreement between the City and an escrow agent; approving the form of the 
official notice of sale and the notice of intention to sell for the refunding certificates of participation; directing 
the publication of the notice of intention to sell for the refunding certificates of participation; approving the 
form of the official statement in preliminary and final form; approving the form of a continuing disclosure 
certificate; authorizing reimbursement of certain expenditures; authorizing the payment of costs of issuance; 
and ratifying previous actions taken in connection therewith. (Mayor) 
5/16/01 , RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Tlieodore Lakey, Deputy City Attorney; Karen 

Ribble, Mayor's Office of Public Finance. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 



City and County of San Francisco 



Printed at 2:29 PM on 3/3/04 



Finance Committee Meeting Minutes May 30, 2001 

Resolution approving the execution and delivery of refunding certificates of participation, in one or more 
series, to refinance, in part and/ or in whole, certificates of participation previously executed and delivered by 
the City and County of San Francisco (the "City"); approving the form of the property and facility lease 
between the City and a trustee; approving the form of the project lease between the City and a trustee 
(including certain indemnities contained therein); authorizing the selection of a trustee; approving the form of 
the trust agreement between the City and a trustee (including certain indemnities contained therein); authorizing 
the selection of an escrow agent; approving the form of the escrow agreement between the City and an escrow 
agent; approving the form of the official notice of sale and the notice of intention to sell for the refunding 
certificates of participation; directing the publication of the notice of intention to sell for the refunding 
certificates of participation; approving the form of the official statement m preliminary and final form; 
approving the form of a continuing disclosure certificate; authorizing reimbursement of certain expenditures; 
authorizing the payment of costs of issuance; and ratifying previous actions taken in connection therewith. 
(Mayor) 

(Fiscal impact.) 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Leno, Peskin 
Absent: 1 - Gonzalez 



010860 [Special Assistants] 
Supervisor Peskin 

Hearing to review current efforts towards reclassification of Special Assistant positions in San Francisco 

government, and to address reclassifications requested since January 1, 2001 as well as planned 

reclassifications by City Departments. 

5/7/01, RECEIVED AND ASSIGNED to Finance Committee. 

5/16/01, CONTINUED. Heard in Committee. Speakers: Andrea Gourdine, Human Resources Director; Carol Isen, Associate Dirctor, 

Professional and Technical Engineers, Local 21; John Bardis. 

Continued to 5/30/01. 

Heard in Committee. Speaker: Andrea Gourdine, Human Resources Director. 
Continued to 6/13/01. 
CONTINUED by the following vote: 

Ayes: 2 - Leno, Peskin 
Absent: 1 - Gonzalez 



ADJOURNMENT 



The meeting adjourned at 3:18 p.m. 



City and County of San Francisco Printed at 2:2" I'M 



to. 35 

7 

3o/oi 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



CITY AND COUNTY 




OF SAN FRANCISCO 



. BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



TO: finance Committee 

FROM: ^Budget Analyst 

SUBJECT: /JVtay 30, 2001 Finance Committee Meeting 

Item 1 - File 01-0699 



May 24, 2001 

DOCUMENTS DEPT. 

MAY 3 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



Note: This item was continued by the Finance Committee at its meeting of 
May 23, 2001. 

Department: Fire Department 

Treasure Island Development Authority 

Item: Resolution approving a new sublease between the City 

and the Treasure Island Development Authority for the 
Fire Fighting Training Center located on Treasure Island, 
at an annual rent of $1,740,000. 

Location: The subject property on Treasure Island is generally 

bounded by 8 th Street to the South, 10 th Street to the 
North, M Street to the West and N Street to the East. 
(See Attachment I for map). 

Purpose of Sublease: Under the proposed sublease, the Fire Department would 

use the Treasure Island property for training purposes. 



Lessor: 

Lessee/Sublessor: 

Sublessee: 

Term of Sublease: 



U.S. Navy (Master Lease) 

Treasure Island Development Authority 

Fire Department 

Commencing retroactively to July 1, 2000 and 
terminating on June 30, 2005, for a sublease term of five 
years (See Comment No. 1). 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Right of Renewal: None 

Site and Number of 

Square Feet: Approximately 6.94 acres (302,400 square feet), including 

four classrooms, several administrative offices, training 
grounds, facilities for water runoff treatment, and a 
computer-controlled, enclosed propane-burning facility 
with six fire-simulator sites and three propane storage 
tanks. 

Rent and Other Costs 

Payable to the Treasure 

Island Authority by the 

Fire Department: $1,740,000 per year, paid annually in advance of the first 

day in July for each fiscal year during the five-year term 
of the sublease (see Comment No. 12). In addition to the 
$1,740,000 annual rent, the Fire Department will be 
required to pay to Treasure Island Development 
Authority additional fees of $153,024 per year, including 
the following two fees: 

(1) The Fire Department will pay for the Common Area 
Maintenance Charge (Navy CAM Charge) fee charged 
by the Navy to the Treasure Island Development 
Authority under the Master Lease. Under the 
proposed sublease, the Fire Department would be 
required to pay $11,850 per month, or $142,200 
annually, to the Treasure Island Development 
Authority for the CAM Charge. 1 

(2) The Fire Department will pay to the Treasure Island 
Development Authority a monthly Landscaping 
Charge of $902, for a total annual charge of $10,824. 

Therefore, the total annual charges to be paid by the Fire 
Department to the Treasure Island Development 
Authority will be $1,893,024 ($1,740,000 in rent plus 
$153,024 in additional fees). 



1 According to Mr. Stephen Proud of the Treasure Island Development Authority, the CAM is based 
on $0,025 per square foot per month for the interior space of the Fire Fighting Training Center 
building and $0,003 per square foot per month for the exterior space. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 






Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Source of Funds: 



Utilities and 
Maintenance: 



Description: 



Mr. Stephen Proud of the Treasure Island Development 
Authority advises that the Fire Department will make 
Navy CAM and Landscaping payments monthly to the 
Treasure Island Development Authority. The proposed 
sublease contains no provisions for annual adjustments in 
the rent, the CAM or the Landscaping Charge. 

Ms. Christine Ragan, Chief Financial Officer of the Fire 
Department, advises that the Fire Department's Fiscal 
Year 2000-2001 General Fund budget includes $1,893,024 
to fund the $1,740,000 in rent and $153,024 in additional 
fees discussed above, which the Fire Department must 
pay to the Treasure Island Development Authority 
retroactively for Fiscal Year 2000-2001 (See Comment No. 
2). 



Under the proposed sublease, the Fire Department would 
pay for all maintenance and utility costs at the subject 
Treasure Island facility. Mr. Proud advises that the Fire 
Department would be required to pay these costs, 
estimated by the Fire Department based on the current 
fiscal year at $561,062 annually ($475,062 for the 
maintenance contract, discussed in Comment No 5, and 
$86,000 for utilities), year round for each year of the five- 
year sublease term. (See Comment No. 4 for all estimated 
costs.) 

On May 2, 1997, the Board of Supervisors authorized the 
creation of the Treasure Island Development Authority as 
a nonprofit public benefit corporation to act as a single 
entity focused on the planning, redevelopment, 
reconstruction, rehabilitation, reuse and conversion of 
former United States Naval Station Treasure Island 
(Resolution No. 244-97-3). On October 12, 1997, the 
California Legislature approved the Treasure Island 
Conversion Act of 1997, which designated the Authority 
as a trustee of the State Tidelands Trust and as a 
redevelopment agency with jurisdiction over Treasure 
Island and Yerba Buena Island. The Treasure Island 
Development Authority currently leases from the Navy 
the Treasure Island Fire Fighting Training Center, under 
a 15-year lease for the period from December 15, 1997 
through December 14, 2012 (see Comment No. 3). 
However, Mr. Proud advises that this lease will no longer 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

Ma}' 30, 2001 Finance Committee Meeting 

be necessary once the Treasure Island Development 
Authority completes the transfer of ownership of the 
Naval Station on Treasure Island from the Navy to the 
Treasure Island Development Authority, expected during 
Fiscal Year 2001-2002. 

The proposed resolution would authorize a sublease 
between the Fire Department and the Treasure Island 
Development Authority for the Fire Department to use 
the Fire Fighting Training Center on Treasure Island. 
The Fire Fighting Training Center, was built and used by 
the Navy in 1992 for fire suppression training. As 
previously noted, the facility consists of four classrooms, 
several administrative offices, training grounds, facilities 
for water runoff treatment, and a computer-controlled, 
enclosed propane -burning facility with six fire-simulator 
sites, which do not emit smoke, and three propane storage 
tanks. 



Tenant 
Improvements: 



Comments: 



Assistant Deputy Chief Joanne Hayes-White, Director of 
Training at the Fire Department, advises that the Fire 
Department uses the Fire Fighting Training Center for a 
variety of in-service and new recruit training purposes, as 
described in Attachment II, provided by the Fire 
Department. Assistant Deputy Chief Hayes-White advises 
that the Fire Department's other main training facility, 
located at 19 th and Folsom Streets, is inadequate for the 
Fire Department's needs, is located in a residential 
neighborhood and does not allow the Fire Department to 
provide live fire training. The Fire Department also 
provides training for Emergency Medical Services (EMS) 
at Fire Department facilities in the Presidio. 

Under the proposed sublease, the Fire Department would 
be responsible for all improvements to the Fire Fighting 
Training Center. As shown in Attachment III, provided by 
the Fire Department, the Fire Department has made a 
total of $479,257 in improvements to the Fire Fighting 
Training Center since June of 1998. 

1. Ms. Ragan advises that the Fire Department is only 
now seeking approval from the Board of Supervisors for 
the subject sublease, retroactively for the period from July 
1, 2000 through June 30, 2001, because the Fire 
Department has been negotiating with the Treasure 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Island Development Authority to finalize the proposed 
sublease since the beginning of Fiscal Year 2000-2001. 

2. According to Ms. Ragan, upon approval of the proposed 
sublease and the release of reserved funds (see Comment 
No. 6), the Fire Department would pay to the Treasure 
Island Development Authority the entire $1,740,000 in 
rent for FY 2000-2001, plus the $11,850 monthly Navy 
CAM fees and the $902 monthly Landscaping fees, 
discussed above, retroactive to July 1, 2000, for a 
approximate total one-time payment of $1,893,024 
($1,740,000 rent plus $142,2000 for 12 months of Navy 
CAM fees and $10,824 for 12 months of Landscaping 
fees). 

3. Assistant Deputy Chief Hayes-White advises that the 
Fire Department first began using the Fire Fighting 
Training Center in December of 1997, under a 15-year 
lease between the City and the U.S. Navy, for the period 
from December 15, 1997 through December 14, 2012. 
Under this lease, the City was not required to pay any 
rent to the Navy. According to Mr. Proud, when the 
Treasure Island Development Authority was established 
in February of 1998, the lease with the Navy transferred 
from the City to the Treasure Island Development 
Authority. Therefore, since February of 1998, the 
Treasure Island Development Authority has maintained a 
lease with the Navy for the Fire Fighting Training 
Center, but the Fire Department has not had a sublease 
with the Treasure Island Development Authority to use 
the training facility. In addition, the Fire Department has 
never paid any rent to the Treasure Island Development 
Authority for the use of the Fire Fighting Training 
Center, according to Mr. Proud. As noted previously, rent 
for Fiscal Year 2000-2001 under the subject sublease of 
$1,893,024 ($1,740,000 in rent plus $153,024 in 
additional fees) will be paid retroactively to the Treasure 
Island Development Authority by the Fire Department. 

4. As shown in Attachment IV, based on information 
provided by the Fire Department, the annual cost to the 
Fire Department for the proposed sublease and operation 
of the Fire Fighting Training Center would be an 
estimated $2,495,990 per year based on current expenses. 
This annual budget of $2,495,990 includes: (a) $1,893,024 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

in rent and additional fees to be paid to the Treasure 
Island Development Authority ($1,740,000 for rent plus 
$142,200 for the Navy CAM Charge plus $10,824 in 
Landscaping fees), (b) $86,000 for utilities, (c) $475,062 
for a maintenance contract (see Comment No. 5), (d) 
$27,446 for materials and supplies, (f) a $10,000 work 
order to the Purchasing Department for reproduction, and 
(g) $4,458 for marketing of the regional training facility 
(see Comment No. 7). Ms. Ragan advises that the Fire 
Department uses existing training staff and salaries to 
provide staffing at the Fire Fighting Training Center. 

5. In 1998 the Fire Department selected AAI Engineering 
Support Inc. on a sole source basis for a five-year contract 
to provide all maintenance at the Fire Fighting Training 
Center, including its six fire-simulator sites and three 
propane storage tanks. Assistant Deputy Chief Hayes- 
White advises that the Fire Department selected AAI 
Engineering Support Inc., because, along with its 
subsidiary company Symtron, AAI Engineering Support 
Inc. is the only supplier of computer-controlled live fire 
simulators. The five-year contract term with AAI 
Engineering Support Inc. began on July 1, 1998 and will 
expire on July 1, 2003. The total contract amount is 
$2,289,355 for the entire five-year term, or an average of 
$457,871 annually. 

6. The Fire Department has a total of $2,100,000 in the 
department's Fiscal Year 2000-2001 budget, currently 
held on reserve, to cover this one-time payment of 
$1,893,024 for rent and other fees. During the Fiscal Year 
2000-2001 budget review process, the Finance Committee 
placed on reserve the $2,100,000 for rent and other fees at 
the Fire Fighting Training Center, pending approval of 
the subject sublease. Ms. Ragan advises that the payment 
of $1,893,024 (including $1,740,000 in rent, $142,200 in 
CAM charges and $10,824 in landscaping charges) to the 
Treasure Island Development Authority is $206,976 less 
than the budgeted amount of $2,100,000, because the 
$2,100,000 amount was an estimate made prior to the 
appraisal of the Fire Fighting Training Center. The 
Budget Analyst recommends that the Finance Committee 
release $1,893,024 of the $2,100,000 in reserved funds if 
the Finance Committee recommends approval of the 
subject sublease, leaving $206,976 on reserve. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



7. Assistant Deputy Chief Hayes-White advises that the 
Fire Department is developing a program to rent the 
Treasure Island Fire Fighting Training Center to other 
local organizations and jurisdictions for limited periods of 
time in an effort to generate additional revenue. As stated 
in Attachment II, for Fiscal Years 1997-1998, 1998-1999 
and 1999-2000, the Fire Department has earned between 
$40,120 and $45,255 per year from renting the facility to 
the California Maritime Academy. Ms. Ragan advises 
that such revenue is deposited into the General Fund. 

8. The proposed sublease states that both the Fire 
Department and the Treasure Island Development 
Authority "...may terminate this Sublease prior to the 
Expiration Date [of June 30, 2005] by giving to the other 
party written notice of intent to terminate the Sublease 
one year prior to the intended date of termination." 

9. According to Mr. Proud, the Treasure Island 
Development Authority hired a private firm, Clifford 
Associates, to appraise the value of the subject Treasure 
Island Fire Fighting Training Center. In March of 2001, 
the appraiser determined that the fair market rent for the 
Fire Fighting Training Center would be $1,740,000 per 
year. Mr. Julian Sutherland of the Real Estate Division of 
the Administrative Services Department has reviewed the 
appraisal of the Fire Fighting Training Center 
commissioned by the Treasure Island Development 
Authority and agreed that the rent charged to the Fire 
Department represents fair market value. Mr. Proud 
advises that this appraisal did not include the $479,257 
in improvements completed by the Fire Department. 

10. Under the proposed sublease, the Fire Department 
indemnifies the Treasure Island Development Authority 
and the Navy, as Master Landlord, and their agents and 
employees as defined in the sublease. The proposed 
sublease states: 

"Subtenant [Fire Department], on behalf of itself 
and Subtenant's Agents, covenants and agrees that 
the Indemnified Parties [described above] and 
Master Landlord shall not be responsible for or 
liable to, and, to the fullest extent allowed by any 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Laws, Subtenant hereby waives all rights against 
the Indemnified Parties and releases them from, 
any and all Losses, including, but not limited to, 
incidental and consequential damages, relating to 
any injury, accident or death of any person or loss or 
damage to any property, in or about the Premises, 
from any cause whatsoever, including without 
limitation, partial or complete collapse of any 
improvements on the Premises due to an 
earthquake or subsidence, except only to the extent 
such Losses are caused by the negligence or willful 
misconduct of the Indemnified Parties." 

According to Mr. Donnell Choy of the City Attorney's 
Office, the indemnification provision contained in the 
sublease is standard in all subleases entered into by the 
Treasure Island Development Authority with any entity 
wishing to sublease property on Treasure Island. Mr. 
Choy advises that if there were another large earthquake 
comparable to or greater in magnitude than the 1989 
Loma Prieta Earthquake during the term of this sublease, 
the City would not be able to look to the Treasure Island 
Development Authority to recover any losses arising 
therefrom, according to Mr. Choy. Mr. Choy advises that 
when the City is acting as the landlord in its own leases, 
the City includes similarly broad indemnification 
provisions in its leases. 

11. The Budget Analyst notes that since November of 
1997 the Fire Department has provided Fire Protection to 
Treasure Island, which includes a fully staffed and 
equipped Fire Station. Ms. Ragan advises that the annual 
cost of providing such Fire Protection for Fiscal Year 
2000-2001 is $3,397,191. The Treasure Island 
Development Authority reimburses the Fire Department 
for such costs, and the Treasure Island Development 
Authority's budget for Fiscal Year 2000-2001 includes a 
total of $3,397,191 to be paid to the Fire Department. 

12. As noted previously, under the proposed sublease, the 
Fire Department would pay to the Treasure Island 
Development Authority the annual rent of $1,740,000 in 
advance of the first day in July for each fiscal year during 
the five-year term of the sublease. Ms. London Breed of 
the Treasure Island Development Authority advises that 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

rent would be paid in advance to simplify transactions 
between the Fire Department and the Treasure Island 
Development Authority. However, Ms. Breed advises that 
the Treasure Island Development Authority would be 
willing develop an alternative payment schedule with the 
Fire Department if requested to do so. 

Recommendations: 1. Approval of the proposed sublease is a policy decision 
for the Board of Supervisors. 

2. If the Finance Committee recommends approval of the 
subject sublease, the Budget Analyst recommends 
releasing $1,893,024 of the $2,100,000 in reserved funds 
for payments to the Treasure Island Development 
Authority, in accordance with Comment No. 6 above. The 
balance of $206,976 in reserved funds would be returned 
to the General Fund. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



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Attachment II 
Page 1 of 3 



San Francisco Fire Department 
Treasure Island "Live Fire" Training Facility 

The San Francisco Fire Department acquired the use of the United States Navy 
Regional Training facility is 1997. Located on the northeastern shore of the island, it 
consists of 7 acre training grounds and nine buildings. 

The main building contains four forty-student classrooms, restrooms, equipment storage 
room, make-shift staff lunch room, and three offices. The offices are used by the 
Director of the facility, the SFFD Captain of In-Service Training, and the Instructors from 
California Maritime Academy. The support building contains a sixty-student classroom, 
equipment storage room, maintenance repair shop, and an office for the site 
maintenance staff. 

A third building, located centrally on the facility grounds, not only contains the electrical 
power distribution panels and water pumps for on site water and sewer, but also houses 
an Self Contained Breathing Apparatus Air tank refilling station. 

The remaining buildings on site contain computer controlled electromechanical systems 
that can create simulated fire and smoke. Three of these building are in active status; 
the others were decommissioned by the Navy prior to our arrival. The active structures 
consist of a four story building which contains maritime components (engine room, 
electrical panel, generator room...) and allows for simulated fires that could occur on the 
various compartments of a large ship. We have added removable props in this building 
to allow adaptation for structural fires that would occur in a high rise or apartment 
building. This allows for both, structural and maritime firefighting operation, within the 
same building. 

A second structure was modified to allow for specific "room and contents" fire with a 
flashover capability. It also has a built in maze so to duplicate the difficulty of dragging a 
hose around corners etc. that would be present during most building fires. A third 
structure, utilized by the California Maritime Academy in teaching the United States 
Coast Guard and Navy, is an outside deck with a mock helicopter that can be fully 
engulfed in flame. 

The facility was built to be in total compliance with EPA standards. Any water used in 
training is processed on-site prior to being pumped to the sewer treatment plant. The - 
flames are propane based, converted to vapor prior to ignition. The computer system 
which operates the propane flames has a multitude of sensors which monitors the 
status of the propane flow and flame temperature to ensure that complete combustion is 
taking place. For safety, fire room temperature is monitored with automatic shutdown if 
temperatures exceed the established limits. With this computer support, we can also 
ascertain the amount of the extinguishing agent that was successfully applied to the fire 
as well as the time element that was needed to perform the fire extinguishment. We can 
control the flame height and regulate the level of visibility by injecting theatrical smoke 
into the rooms. Propane is supplied from three thirty-gallon tanks, cycled through three 
vaporizers, then piped to the simulators. The fenced off "propane farm" is adjacent to 
the facility grounds. 



11 



Attachment II 
Page Z ot 3 



The potential offered by these simulators allows us to maintain a safe and controlled 
simulation of actual fire conditions that a firefighter would be exposed to. With the help 
of this state-of -the art equipment, we are afforded the opportunity to teach, train, 
evaluate, and offer immediate feedback to our students. We currently utilize this facility 
to instruct entry-level as well as veteran firefighters in various aspects of firefighting 
techniques. 

This year, Our In-Service Staff has conducted four cycles of Battalion Based Training. 
This represents a Battalion (Three/Four Engines, Two Trucks, Rescue Squad, Medic 
Unit Battalion Chief) called to extinguish a (simulated) working fire. This fifteen day 
cycle, conducted daily in two sessions, involves all companies and all duty watches. In 
essence, each of our firefighters will receive specific hands-on fire training four times a 
year. This coming year, six cycles have been planned. When In-Service is not involved 
in this activity, they will "detail" companies to the Facility to conduct specialized training 
or work with our new probationary members. 

California Maritime Academy conducts training here. They currently have been our main 
outside source of revenue. They teach basic and advanced maritime training to 
merchant seamen, members of the United States Coast Guard, and United States Army 
sailors. We have also generated money from other Fire Department's in the Bay Area 
on an occasional basis. Our revenue generated during the past three years for outside 
agencies is: 

FY 1997/98 $45,255.00 

FY 1998/99 $40,120.00 
FY 1 999/2000 $ 42, 1 05.00 

Having been newly assigned as Director of this Facility. I have not totalled all the 
amounts for money generated from this fiscal year but I do know that we have $28,000 
due from California Maritime Academy, have generated approximately $12,000.00 from 
IEC for facility "live fire" training as well as classroom use. In addition, we have had two 
Fire Departments use our facility, each generating over $2200.00 in fees and interest 
from two others. IEC has six, one-week classes scheduled. 

My task at this facility is to derive as much use and monitory renumeration as possible. 
During this past year, we have conducted various training sessions in our classrooms, - 
both in house and for outside agencies. I plan to pro-actively advertise this facility to the 
Fire Departments in the nine surrounding Bay Area counties and well as on the City and 
Fire Department's Web site. I am inquiring into securing grant money to help subsidize 
smaller Departments who do not have the financial resource to use our facility. 

In addition, for generation of facility income, I have had inquiries from three other 
maritime educational companies who wish to utilize our facility for mandated maritime 
training. They have acquired the appropriate United States Coast Guard authorization to 
conduct this training and are negotiating with me for available dates. 



12 



Attachme nt II 

Page '3 of 3 P "° 4 



We are still charging the California Maritime Academy from the fee schedule formulated 
in 1997; the new schedule, which will take effect on July 1, 2001, will increase the user 
cost (and money generated) by 50%. My goal, and l feel that is it is reachable, is to 
double the income for the next fiscal year. 



ForanvTadditional information, please contact me. 

Captain Russ Aibano SFFD 
(415) 391-0250 



13 



Attachment III 



San Francisco Fire Department 
Division of Training 

Improvements / Upgrades to Treasure Island regional training facility 



Improvements 



Date 



Cost 



Conversion from high pressure stream to electrical heat generation 

(When the Navy ceased to operate the Treasure Island Steam 
generation plant, it left the facility with out heat or hot water, 
rendering classrooms virtually uninhabitable) 



Jun-00 



520,500 



Replacement of older SCBA refill station compressor w/ high capacity unit 
(This includes hardware for wall mounted storage unit) 



Oct-99 



2,500 



Conversion of two classrooms for use in Department Computer training 
(Addition of circuits, data drops, network wiring, hardware, 
T1 connectivity, furniture, PC clients and printers) 



Jun-99 



95,000 



Upgrades 



Renovation of "Live Fire" structure to simulate urban structure. Jun-98 

(The "Maritime" type hatches were replaced with normal 
dimensional doors and the "Bilge Room" was retrofitted to 
resemble a residential bedroom because of the ability to 
simulate fire fiashovers by igniting overhead propane.) 

Construction of roof simulator Jan-00 

(A series of panels were constructed using replaceable 
4X4 sheets. These panels can be cut with chain 
and multi-purpose saws.) 

Addition of High Pressure Hydrant and four story stand pipe Jan-00 

to existing multi-story structure 

Purchase of 12 Self Contained Breathing Apparatus (SCBAs) Aug-00 



320,000 



2,500 



850 



37,907 



TOTAL OF IMPROVEMENTS AND UPGRADES 



$479,257 



Source: Fire Department 



14 



Attachment IV 



Budget for Division of Training 

Actuals as of 5/17/01 

Actuals Estimated 
040 - Material & Supplies 22,446 27,446 

021 - Non-Personal Services 

2501 PROMOTIONAL & ENTERTAINMENT 4,458 4,458 

2799 OTHER PROFESSIONAL SERVICES 

(Management Contract with AAI Engineering Support Inc.) 
321 1 ELECTRICITY, HEAT & WATER 



353,927 


475,062 


53,481 


86,000 


411,866 


565,520 




1,893,024 


10,000 


10,000 



Lease Agreement with the Treasure Island Authority 

Work Orders 

081 PR Information Services - Workorder to 

the Purchasing Department for Reproduction 

TOTAL Non-Salary 2000-2001 444,312 2,495,990 

Source: Information Provided by the Fire Department 



15 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Item 2 - File 01-0843 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Comments: 



Mayor's Criminal Justice Council 

Ordinance appropriating $200,000 of the General Fund 
Reserve to fund a Gang Outreach and Youth Violence 
Prevention Program in the Mission and Bayview Hunters 
Point Neighborhoods through the Mayor's Criminal 
Justice Council. 

$200,000 

FY 2000-2001 General Fund Reserve 

The proposed ordinance would appropriate $200,000 from 
the FY 2000-2001 General Fund Reserve to fund 
programs to serve youths living in the Mission and 
Bayview Hunters Point neighborhoods who are at risk for 
(a) participating in gang violence or (b) for becoming 
involved in the criminal justice system. According to Mr. 
Eugene Clendinen of the Mayor's Criminal Justice 
Council (MCJC), MCJC would issue Requests for 
Proposals (RFP) to nonprofit community-based 
organizations for programs to serve at-risk youth in 
approximately mid-July, 2001. MCJC would provide 
$100,000 to serve at-risk youth in the Mission District 
and $100,000 to serve at-risk youth in the Bayview 
Hunters Point neighborhood. 

1. According to Mr. Clendinen, the proposed service 
programs in the Mission and Bayview Hunters Point 
neighborhoods would target the hardest-to-serve youths. 
Mr. Clendinen states that the subject RFPs would require 
that the nonprofit community-based organizations submit 
a plan, outlining the organization's strategy for working 
with this population. 

2. Currently, MCJC has several programs in the Mission 
an(^ Bayview Hunters Point neighborhoods to serve 
youths who are at-risk for participating in gang violence 
or for becoming involved in the criminal justice system. 
MCJC is in the process of issuing an RFP for a $125,000 
State grant to provide counseling and other services to 
youth in the Mission District. Mr. Clendinen states that 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

16 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

MCJC has requested funds in the FY 2001-02 MCJC 
budget for on-going programs in the Mission and Bayview 
Hunters Point neighborhoods serving at-risk youth. The 
Mission District programs include (a) Columbia Park, a 
non-profit organization, to provide a "safe-haven" 
program, which includes counseling and other services, to 
at-risk youth in the Mission District, (b) the Mission 
Neighborhood Center to provide gang-related intervention 
to young women and men in the Mission District, (c) the 
Instituto de la Raza to provide services to youth in the 
criminal justice system with mental health disorders, and 
(d) the Community Bridges Beacon program for case 
management services. The Bayview Hunters Point 
programs include (a) the Bayview Hunters Point "safe 
haven" program which provides counseling and other 
services to at-risk youth, (b) the Girl's 2000, a nonprofit 
organization, which provides services to young women in 
the Bayview Hunters Point neighborhood, and (c) the 
Hunters Point Boys and Girls Club, and the Bayview 
Beacon program, which provide case management 
services. In addition, MCJC has applied jointly with the 
Juvenile Probation Department and the Department of 
Children, Youth, and their Families for a $150,000 
Federal Department of Justice planning grant for 
programs targeting gang intervention in the Mission and 
Bayview Hunters Point neighborhoods. 

3. The Budget Analyst considers approval of the proposed 
ordinance to be a policy matter for the Board of 
Supervisors, because the proposed ordinance would 
appropriate funds from the FY 2000-2001 General Fund 
Reserve for a new program. Such funds would be carried 
over and would be expended in FY 2001-2002. 

4. If the proposed supplemental appropriation is 
approved, the $200,000 should be reserved, pending 
completion of the RFP process and submission of budget 
details to the Finance Committee. 

Recommendations: 1. Approval of the proposed ordinance is a policy matter 

for the Board of Supervisors, as noted in Comment 3. 

2. If the proposed ordinance is approved, reserve funds in 
the amount of $200,000, pending completion of the RFP 

ROARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



process and submission of budget details to the Finance 
Committee, as noted in Comment 4. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Item 3 - File 01-0682 
Department: 

Item: 



Description: 



San Francisco Redevelopment Agency (SFRA) 
Transbay Terminal Joint Powers Authority 

Resolution supporting AB 1419, requiring Caltrans to 
transfer land: (a) to the San Francisco Redevelopment 
Agency (SFRA) for the development of the Transbay 
Terminal Project area and (b) to the Transbay Joint 
Powers Authority for the development of the terminal 
building and Caltrain extension; and requiring the SFRA 
to dedicate to the Transbay Terminal Project any Tax 
Increment funds and net proceeds from the disposition of 
State-owned land. 

According to Ms. Maria Ayerdi of the Mayor's Office of 
Economic Development, Assembly Bill (AB) 1419 defines 
the Transbay Terminal Project as: (a) the construction of 
a new intermodal transit terminal on the site of the 
existing Transbay Terminal at First and Mission Streets 
and (b) the underground extension of CalTrain from 4 th 
and Townsend Streets to the new terminal. 

According to Ms. Ayerdi, the Transbay Terminal Project is 
estimated to cost $1,894,731,263. Funding sources and 
uses are described in Attachment I, provided by Michelle 
Sexton of the City Attorney's Office. As explained in 
Attachment I, the $1,362,685,311 anticipated to be 
received during construction would consist of: (1) Tax 
Increment ($14,935,300), (2) Land Sales ($22,513,920), (3) 
MTC Grant ($84,000,000), (4) FHWA Funds 
($10,000,000), (5) Federal Loan Proceeds ($636,236,091) 
to be issued by the Transbay Joint Powers Authority, and 
(6) Series 2003 Bond Proceeds to be issued by the 
Transbay Joint Powers Authority ($595,000,000). A 
funding gap of $532,045,952 is anticipated (the total cost 
of $1,894,731,263 less the $1,362,685,311) and Ms. Ayerdi 
informs that additional funding sources have not been 
identified at this time. 

Ms. Ayerdi explains that the State Department of 
Transportation (CalTrans) owns the existing Transbay 
Terminal and surrounding land, totaling approximately 
19.3 acres, or approximately 840,000 square feet, which is 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

bordered by Mission, Bryant, 2 nd , and Spear Streets as 
shown in Attachment II. Under the Transbay Terminal 
Project a new Transbay Terminal would be constructed on 
the site of the existing Terminal at First and Mission 
Streets. The Transbay Terminal Project, which would 
replace the existing Transbay Terminal with a new 
intermodal terminal, is part of the larger Transbay 
Redevelopment Project, a project that would consist of the 
development by the SFRA of an estimated 4,000 
residential units as well as commercial development in 
the area surrounding the Transbay Terminal. Ms. Ayerdi 
informs that construction of the new terminal is 
anticipated to begin in 2003 and be completed by late 
2008. 

Ms. Ayerdi explains that AB 1419 would transfer, from 
CalTrans to SFRA and the Transbay Joint Powers 
Authority, the parcel on which the existing Transbay 
Terminal is located and surrounding parcels, starting in 
2002 and ending in 2008. Ms. Ayerdi advises that in 
accordance with AB 1419, the transfer of the State-owned 
parcels would allow the City to generate the additional 
necessary funding sources for the Transbay Terminal 
Project. Ms. Ayerdi advises that AB 1419 would also 
require the SFRA to dedicate to the project Tax Increment 
funds and the other proceeds, from the development, 
lease, sale or disposition of the State-owned parcels. 

AB 1419 would also require the SFRA to pay relocation 
benefits to transit bus operators and other businesses 
dislocated as a result of the project. Ms. Ayerdi informs 
that as of the writing of this report she does not have an 
estimate of such relocation costs. AB 1419 would also 
require the Transbay Joint Powers Authority to allocate 
any proceeds that remain after completion of the project, 
from the development, lease, sale or disposition of the 
State-owned parcels, to other transportation projects that 
benefit the entire San Francisco Bay Area, according to 
Ms. Ayerdi. 

Comments: 1. Ms. Ayerdi advises that the Transbay Joint Powers 

Authority was created April 4, 2001, pursuant to State 
law. Ms. Ayerdi informs that it consists of 5 members, 
including one appointed by the Peninsula Corridor Joint 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

20 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Powers Board (CalTrain), one appointed by AC Transit, 
and three appointed by the City and County of San 
Francisco. Ms. Ayerdi informs that of the San Francisco 
members, one is appointed by the Board of Supervisors, 
one is appointed by the Municipal Transportation Agency 
Board of Directors, subject to Board of Supervisors 
approval, and one is appointed by the Mayor. She advises 
that such members were appointed shortly after the 
creation of the Transbay Joint Powers Authority. Ms. 
Ayerdi explains that the Transbay Joint Powers Authority 
would be the entity that designs, builds, and operates the 
new Transbay Terminal. Ms Ayerdi further advises that 
the land parcels on which the existing terminal is located 
and the adjacent ramps will be transferred to the 
Transbay Joint Powers Authority, if AB1419 is approved. 
The remaining parcels would be transferred to the SFRA. 

2. Ms. Ayerdi advises that AB1419 currently requires that 
Caltrans lease selected parcels of land to the Transbay 
Terminal Joint Powers Authority for bus storage. 
However, Ms. Ayerdi further advises that she anticipates 
that AB 1419 will be amended to instead require Caltrans 
to grant easements directly to AC Transit and the Golden 
Gate Bridge Highway and Transportation District. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

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■ ATTACHMENT I 

Date: 5/24/01 Page 2 of 2 

Sender: Michelle Sexton 

To: Harvey Rose, Renata Falk, Maria Ayerdi 

Priority: Normal 

Subject: Re: Transbay Spreadsheet ___^ 

For your analysis under description to replace second paragraph: 

The section entitled "Uses of Funds - Construction" sets forth during 
the 8 year construction period the costs of designing and building 
the: (1) Terminal Building, (2) the Temporary Terminal and access ramp 
- which will provide continuous service during the construction (on 
the current site of the existing terminal) of the new terminal 
building; and (3) the rail extension from 4th and Townsend to 2nd and 
Mission. The total cost of the project will be $1,894,731,263. 

The section entitled "Sources of Funds - During Construction" sets 
forth during the 8 year construction period the sources of revenues to 
pay for the project. These sources include: (1) Tax Increment; (2) 
Land Sales; (3) MTC Grant; (4) FHWA Funds; (5) Funding Gap - 
unidentied at this time; (6) TIFIA Loan Draws - a federal loan program 
to be taken out by the Transbay Joint Powers Authority; and (7) Series 
2003 Bond Proceeds to be issued by the Transbay Joint Powers Authority 
and not the City and County of San Francisco. 

The sources set forth in the preceding paragraph reflect only the 
amounts received during the construction of the new terminal . Any 
amounts received (e.g., land sales of approximately $400MM and Tax 
Increment of approximately $800MM) after construction of the new 
terminal will be applied to pay off the TIFIA Loan and the Series 2003 
Bonds . 



23 



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i 



attachment; i^. - 

,Page 1. of 1. ; 



The large area bounded by a heavy black line is the Transbay 
Redevelopment Project area, with the exception of the smaller 
parcels bounded by a heavy black line within that area. 




Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Item 4 - File 01-0863 
Item: 

Amount: 
Source of Funds: 

Description: 



Budget: 



Motion releasing $500,000 placed on Board of Supervisors 
reserve for infrastructure improvements in the Sunset 
District. 

$500,000 

General Fund monies placed on reserve in the 
Department of Public Works' (DPW) Fiscal Year 2000- 
2001 budget. 

During the Fiscal Year 2000-2001 budget hearings, the 
Board of Supervisors approved an appropriation of 
$500,000 to fund infrastructure improvements in the 
Sunset District and placed the $500,000 on reserve 
pending submission of project plans and budget details. 
The subject $500,000 in reserved funds would fund the 
Sunset infrastructure improvements listed in the table on 
the following page. One of the following three 
departments will oversee each of the projects, as shown in 
the table below: Department of Public Works (DPW), the 
Recreation and Park Department (RPD), and the 
Department of Parking and Traffic (DPT). Attachment I, 
provided by DPW and RPD contains a more detailed 
description of each project. 

Attachment II, provided by DPW and RPD, contains 
budget details for the subject projects. A summary budget 
is as follows: 



Summary Budget of 
Sunset Infrastructure Improvements 


Cost 


Engineering and Design 
Materials and Supplies 
Construction Management 
Construction 

Construction Completed by City Departments 

Construction Contracts 


107,589 

9,357 

47,060 

20,721 
315,273 


Total 


$500,000 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Project 


City 
Dept 


Estimated Start 
Date 


Estimated 
End Date 


Amount 


Pedestrian Improvements 

Sunset Blvd. and Yorba Street 


DPT 


July 2001 


FaU 2002 


$90,000 


Doggie Diner Head Repair 


DPW 


4/1/2001 
(see Comment No. 1) 


June 29, 
2001 


25,000 


West Sunset Playground 

Bleacher Renovations 


RPD 


July 1, 2001 


July 2002 


250,000 


Ocean Beach Restrooms 

Design and Planning to renovate 
restrooms at the end of Judah and 
Wawona Streets 


RPD 


July 1, 2001 


January 2002 


75,500 


Sunset Playground 

Replace mechanical equipment in 
Kiln Room 


RPD 


July 1, 2001 


Sept. 2001 


30,000 


Sunset Playground 

Replace two Ping-Pong tables 


RPD 


July 1, 2001 


July 2001 


500 


Sunset Playground 

Bathroom stall replacement 


RPD 


July 1, 2001 


August 2001 


5,000 


Parkside Square 

Lighting Improvements 


RPD 


July 1, 2001 


August 2001 


24,000 


Total 


$500,000 



Comments: 



1. According to Mr. Nelson Wong of DPW, DPW began 
repairs on the Doggie Diner Head soon after it fell on 
April 1, 2001, because the exposed foundation required 
immediate attention. Mr. Wong advises that DPW has 
incurred costs totaling $14,700, or 59 percent, of the total 
$25,000 in subject reserved funds budgeted for the Doggie 
Diner Head repairs. Therefore, the proposed motion 
should be amended to provide for retroactive 
authorization. 



2. As shown in Attachment II, DPW plans to select 
outside contractors to complete portions of the projects 
shown in the table on the following page. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Projects Requiring Construction Contracts 


Amount 
Budgeted for 
Construction 

Contract 


Pedestrian Improvements 

Sunset Blvd. and Yorba Street 


$52,800 


Doggie Diner Head Repair 


15,345 


West Sunset Playground 

Bleacher Renovations 


200,000 


Sunset Playground 

Replace equipment in Kiln Room 


24,200 


Sunset Playground 

Bathroom stall replacement 


4,228 


Parkside Square 

Lighting Improvements 


18,700 


Total 


$315,273 



Recommendation: 



According to Mr. Wong of DPW and Mr. Gary Hoy of RPD, 
contractors for the above construction projects will be 
selected through a competitive bid process. 

1. Amend the proposed motion to provide for retroactive 
authorization, pertaining to $14,700 of this $500,000 
request, in accordance with Comment No. 1 above. 

2. Approve the proposed release of reserved funds, as 
amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



Attachment I 
Page 1 of k 
SUNSET INFRASTRUCTURE IMPROVEMENTS 

SUNSET BOULEVARD AND YORBA STREET, PEDESTRIAN IMPROVEMENTS 

Due to various pedestrian related fatality and accidents at this location, the San Francisco Police 
Department's Richmond Station and the pedestrian safety task force requested a pedestrian safety 
assessment for this location. DPT conducted a study and found that conditions could be improved if 
pedestrians crossing Sunset Boulevard were channeled to the south side of the intersection. 

Due to the presence of a center median on Sunset Boulevard and the lack of curb ramps in the area, 
certain construction work needs to be done to make this crossing possible. The work entails constructing 
eight curb ramps, paving a section of the median, installing a (ladder) crosswalk, constructing a section of 
sidewalk to connect to the bus shelters, and installing lights within the crosswalk. See attached sketch (to 
be faxed to you). 

The initial proposal was for two projects, one for 540,000 and one for $50,000. It is proposed that the 
projects be combined for a combined cost of $90,000. The cost is summarized as follows: 

City Forces 

• Engineering, construction management and coordination $15,000 

• Curb ramps, median modification, sidewalk & crosswalk $25,000 

By Contract 

• Lighted crosswalk (lights imbedded in crosswalk) $50,000 

Total: $90,000 

Further information on these improvements is available by calling Jack Fleck or Amanuel Haile of DPT at 
554-2344 and 554-2329, respectively. 

DOGGIE DINER HEAD REPAIR 

On Sunday, April 1 , 2001 , the Doggie Diner head located at the northeast corner of 46 lh Avenue and Sloat 
Boulevard toppled as a result of high winds and fell into the street. The head was damaged. The pipe 
support, which was imbedded in concrete, was rusted and was sheared off at the base. 

DPW proposes to repair the head, pour a new foundation with a new pipe support and remount the head 
on the support. DPW estimates that it needs $25,000 for the project. The cost breakdown is shown 
below. The repair work is currently underway and is expected to be completed by June 29, 2001 . Charles 
Camilleri of DPW's Bureau of Building Repair (695-2040) can provide additional information on the 
repairs. 

1 . BSSR removal, transportation and setting of monument $2300.00 

2. Estimate for structural engineering new foundation design, $1742.00 
permits and inspection. 

3. Sand blasting, lead abatement dog head $2000.00 

4. Stand pipe fabrication and galvanize coating. $4800.00 

5. Breakup concrete, demo and install new foundation. $5858.00 

6. Repair dog head and paint. $8300.00 

total $ 25,000.00 

Items #1, 2, 4, and 5 have already been completed. Item #3 is done but not billed. Item #6 is 
underway and will be completed by the end of June. 

Source: Department of Public Works 

28 



Attachment I 
Page 2 of 4 



RECREATION AND PARK DEPARTMENT PROJECTS 

Six infrastructure projects belonging to the Recreation and Park Department have 
been identified for the Sunset District. Please call Gary Hoy of Recreation and 
Park at 831-2703 for further information on these proposed projects. 



WEST SUNSET PLAYGROUND - BLEACHER RENOVATIONS 

West Sunset Playground's bleachers have deteriorated over the years as a result of the 
harsh "salt fog" environment. The project will provide for the design, management and 
construction of renovations to the bleachers to remove and replace existing fencing and 
protection rails, which have corroded to an unsafe condition. Lead based paint 
(hazardous materials) will be abated and waterproofing systems refurbished to prevent 
leaking into the storage and rest rooms below. 

The cost is summarized as follows (Details provided on separate spreadsheet): 

City Forces 

• Design, Engineering, and construction management $50,000 

By Contract 

• Construction Contract and 10% Contingency $200,000 

Total: $250,000 

Further information on these improvements is available by calling Gary Hoy, Capital 
Program Manager, Recreation and Park Dept. at 831-2703. 



OCEAN BEACH RESTROOMS (Judah and Wawona) - RENOVATION STUDY 

The project will provide for the planning, development and conceptual design, of 
renovations to the Convenience Facilities located at the end of Judah and Wawona 
Streets which may include the addition of multiple-use activity rooms for the use of the 
community, neighborhood organizations, and individual citizens located in District 4. It is 
anticipated that a change in use will deter illicit the activity which is currently a problem 
at both sites. Studies will include the assessment of physical condition; lead based paint, 
hazardous materials, and waterproofing systems. A potential project scope, schedule 
and budget will be prepared for incorporation into the Recreation and Park Capital Plan. 

The cost is summarized as follows (Details provided on separate spreadsheet): 

City Forces 

• Assessment, design, engineering, and management $75,500 

Total: $75,500 

Further information on these improvements is available by calling Gary Hoy, Capital 
Program Manager, Recreation and Park Dept. at 831-2703. 



Source: Recreation and Park Department 29 



Attachment I 
Page 3 of A 



PARKSIDE SQUARE - LIGHTING IMPROVEMENTS 



Parkside Square enjoys an active community of Tai Chi advocates. The project will 
provide for the design, management and construction of lighting improvements to the 
courts at Parkside Square to facilitate early morning classes. In addition, the lights will 
benefit tennis players during evening hours. 

The cost is summarized as follows (Details provided on separate spreadsheet): 

City Forces 

• Design, Engineering, and construction management $5,300 

By Contract 

• Construction Contract and 10% Contingency $18,700 

Total: $24,000 

Further information on these improvements is available by calling Gary Hoy, Capital 
Program Manager, Recreation and Park Dept. at 831-2703. 



SUNSET PLAYGROUND - BATHROOM STALL REPLACEMENT 

Sunset Playground's bathroom stalls have deteriorated over the years as a result of the 
harsh environment. The salt fog, which permeates the Sunset District, has a corrosive 
effect on the metal stalls dividing bathroom fixtures. This project will provide for the 
design, management and replacement of those stalls in both the men's and women's 
bathrooms. 

The cost is summarized as follows (Details provided on separate spreadsheet): 

City Forces 

• Design, and management $778 

By Contract 

• Construction Contract and 10% Contingency . $4,228 

Total: $5,000 

Further information on these improvements is available by calling Gary Hoy, Capital 
Program Manager, Recreation and Park Dept. at 831-2703. 



Source: Recreation and Park Department 3Q 



Attachment I 
Page 4 of 4 



SUNSET PLAYGROUND - KILN ROOM MECHANICAL EQUIPMENT 

Sunset Playground's Kiln Room is not properly ventilated. To protect the health and 
safety of the adults and children, who use the facility, the mechanical system must be 
replaced. The project will provide for the design, management and replacement of the 
ventilation system in the kiln room as well as provide for plumbing improvements to 
separate excess clay from the waste plumbing systems. 

The cost is summarized as follows (Details provided on separate spreadsheet): 

City Forces 

• Design, engineering and management $5,800 

By Contract 

• Construction Contract and 10% Contingency $24,200 

Total: $30,000 

Further information on these improvements is available by calling Gary Hoy, Capital 
Program Manager, Recreation and Park Dept. at 831-2703. 

SUNSET PLAYGROUND - PING-PONG TABLES 

Sunset Playground's Ping-Pong tables have worn to an unplayable condition. The funds 
identified below will provide for the replacement of two tables. 

The cost is summarized as follows: 

By Contract 

• Purchasing Contract (2 Tables @ $250/each) $500 

Total: $500 

Further information on these improvements is available by calling Gary Hoy, 
Capital Program Manager, Recreation and Park Dept. at 831-2703. 



31 
Source: Recreation and Park Department 



Attachment II 
Page 1 of 7 



SUNSET INFRASTRUCTURE IMPROVEMENTS 

ESTIMATED PROJECT BUDGET 

Sunset Boulevard & Yorba Street Pedestrian Improvements 



Engineering Design 

DPW- Bureau of Engineering 

Position 

Assistant Civil Engineer 
Civil Engineer 
Senior Civil Engineer 
Engineering Associate 
Administrative Assistant 

TOTAL 



Class. No. 


Hrly 


Rate 


Hrs 




Totals 


5204 


$ 


72 


31 


$ 


2,227 


5208 


$ 


99 


4 


$ 


395 


5210 


$ 


114 


6 


$ 


685 


5366 


$ 


73 


8 


$ 


586 


1446 


$ 


56 


20 


$ 
$ 


1,112 
5.005 



Construction Management 

DPW- Bureau of Construction Management 

Position 



Class. No. 


Hrly 


Rate 


Hrs 




Totals 


5208 


$ 


99 


64 


$ 


6,315 


5210 


$ 


114 


24 


$ 


2,741 


5366 


$ 


73 


8 


$ 


586 


1446 


$ 


56 


16 


$ 
$ 


889 
10.531 



Civil Engineer 
Senior Civil Engineer 
Engineering Associate 
Administrative Assistant 

Construction 

DPW- Bureau of Building Repair 

Position 



TOTAL 



Class. No. Hrly Rate Hrs 



Totals 



Cement Mason Supervisor I 
Cement Mason 
General Laborers 
Truck Driver 



TOTAL 



Materials and Supplies (allowance) 

Construction 

by Contract 
Construction Contract **** 
10% Construction Contingency 

TOTAL 

TOTAL PROJECT COST 

Source: Department of Public Works 



7227 


$66.98 


71 




$4,756 


7311 


$49.12 


80 




3,930 


7514 


$42.96 


80 




3,437 


7355 


$47.99 


60 




2,879 








$ 


15,002 








$ 


6.662 



S 


$48,000 
4,800 

52.800 


s 


90,000 



32 



Attachment II 
Page 2 of 1 



SUNSET INFRASTRUCTURE IMPROVEMENTS 

ESTIMATED PROJECT BUDGET 
Doggie Diner Head Repair 



Engineering Design 

DPW- Bureau of Engineering 

Position 



Class. No. Hrly Rate Hrs 



Totals 



Assistant Civil Engineer 
Civil Engineer 



Construction 

DPW- Bureau of Building Repair 

Position 



5204 
5208 



72 

99 



16 

6 



TOTAL 



Class. No. Hrly Rate Hrs 



1,150 

592 

1.742 



Totals 



Cement Mason Supervisor I 
Cement Mason 
General Laborers 
Truck Driver 



TOTAL 



Materials and Supplies (allowance) 

Construction 

by Contract 
Construction Contract **** 
10% Construction Contingency 

TOTAL 

TOTAL PROJECT COST 

Source: Department of Public Works 



7227 $66.98 

7311 $49.12 

7514 $42.96 

7355 $47.99 



10 $670 

20 982 

48 2,062 

32 1,536 



$ 5.25Q 

$ 2,695 



$ 


$13,950 
1,395 

15.345 


s 


25,032 



33 



SUNSET INFRASTRUCTURE IMPROVEMENTS 

ESTIMATED PROJECT BUDGET 

West Sunset Playground - Bleacher Improvements 



Attachment II 
Page 3 of 7 



Engineering Design 

DPW- Bureau of Engineering 

Position 



Class. No. Hrly Rate Hrs 



Totals 



Assistant SME Engineer 

Structural/Mechanical/Electrical (SME) Engineer 
Senior SME Engineer 
SME Engineering Associate 
Administrative Assistant 

TOTAL 



5204 


S 


72 


120 


$ 


8,622 


5208 


$ 


99 


20 


S 


1,973 


5210 


$ 


114 


24 


$ 


2,741 


5366 


$ 


73 


32 


$ 


2,344 


1446 


$ 


56 


76 


$ 


4,225 






$ 


19,906 



Construction Management 

DPW- Bureau of Construction Management 



Position 



Class. No. 


Hrly 


Rate 


Hrs 


Totals 


5208 


$ 


99 


176 


$ 17,366 


5210 


$ 


114 


72 


$ 8,166 


5366 


$ 


73 


32 


S 2,344 


1446 


$ 


56 


40 


$ 2,218 
S 30.094 



Civil Engineer 
Senior Civil Engineer 
Engineering Associate 
Administrative Assistant 



TOTAL 



Construction 

by Contract 
Construction Contract **** 
10% Construction Contingency 



TOTAL 
TOTAL PROJECT COST 



$180,000 
20,000 

£ 200.000 

$ 250,000 



Source: Recreation and Park Department 



34 



SUNSET INFRASTRUCTURE IMPROVEMENTS 

ESTIMATED PROJECT BUDGET 

Ocean Beach Great Highway Bathrooms - Planning Study 

Design 

DPW- Bureaus of Architecture/Engineering 



Attachment II 
Page 4 of 7 



Position 



Class. No. Hrly Rate Hrs 



Totals 



Architectural Assistant 
Architectural Associate 
Senior Architect 
Architect 



Position 



5261 
5266 
5270 
5268 



72 320 

88 64 

114 24 

99 80 



TOTAL 



22,992 
5,632 
2,736 
7,894 

3 9,254 



Class. No. 


Hrly Rate 


Hrs 




Totals 


5208 


$ 99 


200 


$ 


19,734 


5210 


$ 114 


80 


$ 


9,137 


5366 


$ 73 


40 


$ 


2,930 


1446 


$ 56 


80 


$ 
$ 

$ 


4,446 
36.247 

75,500 



Structural Mechanical Electrical (SME) Engineer 
Senior SME Engineer 
SME Engineering Associate 
Administrative Assistant 

TOTAL 

TOTAL PROJECT COST 



Source: Recreation and Park Department 



35 



SUNSET INFRASTRUCTURE IMPROVEMENTS 

ESTIMATED PROJECT BUDGET 
Sunset Kiln Room 



Attachment II 
Page 5 of 7 



Engineering Design 

DPW- Bureau of Engineering 

Position 



Class. No. Hrly Rate Hrs 



Totals 



Assistant Mech. Engineer 
Mechanical Engineer 



5204 
5208 



72 
99 



20 



TOTAL 



Construction Management 

DPW- Bureau of Construction Management 

Position 



1,437 

789 

2.226 



Class. No. 


Hrly 


Rate 


Hrs 




Totals 


5208 


$ 


99 


16 


$ 


1,579 


5210 


$ 


114 


6 


$ 


672 


5366 


$ 


73 


12 


$ 


879 


1446 


$ 


56 


8 


$ 
$ 


445 
3.574 



Mechanical Engineer 
Senior Engineer 
Engineering Associate 
Administrative Assistant 



TOTAL 



Construction 

by Contract 
Construction Contract **** 
10% Construction Contingency 



TOTAL 



TOTAL PROJECT COST 

Source: Recreation and Park Department 



$22,000 
2,200 

$ 24.200 

$ 30,000 



36 



Attachment II 
Page 6 of 7 



SUNSET INFRASTRUCTURE IMPROVEMENTS 

ESTIMATED PROJECT BUDGET 

Sunset Playground Bathroom Stall Replacement 



Engineering Design 

DPW- Bureau of Engineering 

Position 



Class. No. Hrly Rate Hrs 



Totals 



Architectural Assistant 
Architect 



TOTAL 



5261 


$ 


72 


8 


S 


575 


5268 


$ 


99 


2 


S 


197 
772 



Construction 

by Contract 
Construction Contract **** 
10% Construction Contingency 

TOTAL 

TOTAL PROJECT COST 

Source: Recreation and Park Department 



S3, 840 
388 

$ 4, 228 

$ 5,000 



37 



Attachment II 
^age / of 7 



SUNSET INFRASTRUCTURE IMPROVEMENTS 

ESTIMATED PROJECT BUDGET 
Parkside Lighting Improvements 



Engineering Design 

DPW- Bureau of Engineering 

Position 



Class. No. Hrly Rate Hrs 



Totals 



Assistant Electrical Engineer 
Electrical Engineer 
Senior Elec. Engineer 
Administrative Assistant 



TOTAL 



5204 


$ 


72 


16 


S 


1,150 


5208 


$ 


99 


8 


$ 


789 


5210 


$ 


114 


2 


$ 


228 


1446 


S 


56 


5 


$ 


271 






$ 


2,438 



Construction Management 

DPW- Bureau of Construction Management 

Position 



Class. No. 


Hrly 


Rate 


Hrs 




Totals 


5208 


$ 


99 


16 


$ 


1,579 


5210 


S 


114 


8 


$ 


914 


5366 


$ 


73 


2 


$ 


147 


1446 


$ 


56 


4 


$ 
$ 


222 
2,861 



Civil Engineer 
Senior Civil Engineer 
Engineering Associate 
Administrative Assistant 



TOTAL 



Construction 

by Contract 
Construction Contract **" 
10% Construction Contingency 

TOTAL 

TOTAL PROJECT COST 

Source: Recreation and Park Department 



$17,000 
1,700 

$ 18.700 

$ 24,000 



38 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Item 5 - File 01-0549 

Note: At the Finance Committee meeting of May 23, 2001, an amended 
supplemental appropriation ordinance was submitted to the Finance 
Committee by the Controller. This report is based on the amended version 
of the proposed supplemental appropriation. 



Department: 
Item: 



Amount: 



Fire Department 

Supplemental Appropriation for Uniform Salaries, Mandatory 
Fringe Benefits and Overtime costs of uniform Firefighters 
and Investigators in the Fire Department 



$3,360,476 



Source of funds: Airport Revenues 



Description: 



Increased Fire Inspection Services Revenue 
Increased Fire Plan Checking Revenue 
Increased Paramedic Services Revenue 
Transfer of General Fund Monies Appropriated 
in the Police Department's FY 2000-2001 
budget for payment of rent for use of Police 
Training Facilities at Treasure Island 
to the Fire Department 
Total Sources 



$795,476 
505,000 
360,000 
500,000 



$ 1.200.000 
$3,360,476 



The proposed supplemental appropriation is comprised of the 
following expenditures for Overtime, Uniform Salaries and 
Mandatory Fringe Benefits : 



Overtime 
Uniform Salaries 
Mandatory Fringe Benefits 
Total 



$2,160,476 
960,000 
240.000 

$3,360,476 



The original proposed supplemental appropriation ordinance 
was in the amount of $2,991,267, including $1,626,267 in 
General Fund Reserve monies, for Fire Department Overtime 
expenditures. The Budget Analyst recommended that the 
Finance Committee reduce the original proposed supplemental 
appropriation request of $2,991,267 for Overtime by $830,791 
to $2,160,476. The Budget Analyst further recommended that 
the $1,626,267 in General Fund Reserve monies be eliminated 
through the recommended reduction of $830,791 in Overtime 
expenditures and that Airport Revenues be used as a source of 
funds in the amount of $795,476. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

39 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



The amended version of the proposed supplemental 
appropriation, as submitted by the Controller, reflects the 
recommendations of the Budget Analyst. 

In addition, the amended version of the proposed supplemental 
appropriation would also reappropriate to the Fire Department 
$1,200,000 in General Fund monies currently appropriated in 
the Police Department's FY 2000-2001 budget for an annual 
payment to Treasure Island for rent of Police Training 
Facilities located on Treasure Island. As of the writing of this 
report, the sublease agreement between the Police Department 
and Treasure Island has not been approved by the Finance 
Committee. 

According to Mr. Matthew Hymel, Chief Deputy Controller, if 
the Police Department sublease of Treasure Island facilities is 
not approved, the General Fund payment of $1,200,000 for the 
use of that facility cannot be made to Treasure Island. 
Therefore, Mr. Hymel states that the Treasure Island budget, 
which assumed approval of the proposed sublease, will incur a 
deficit of $1,200,000 for FY 2000-2001. 

The Fire Department's FY 2000-2001 budget includes work 
order expenditures in the amount of $3,397,191 for Fire 
suppression services on Treasure Island. These work order 
expenditures are funded by a payment from funds 
appropriated in the Treasure Island budget. 

By transferring the $1,200,000 from the Police Department 
budget to the Fire Department budget, as is being proposed in 
the amended version of the proposed supplemental 
appropriation, Fire Department work order expenditures 
would be covered by funds that would have otherwise have 
been paid to Treasure Island by the Police Department and 
Treasure Island's direct payment for Fire Department 
expenditures can be reduced by $1,200,000 from $3,397,191 to 
$2,197,191. The Treasure Island budget deficit resulting from 
the absence of an approved sublease with the Police 
Department would therefore be eliminated. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

40 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Comments: 



Recommendations: 



1. The Budget Analyst continues to recommend approval of 
the proposed supplemental appropriation for Fire Department 
Overtime in the reduced amount of $2,160,476 (the original 
request of $2,991,267 less $830,791 and further substitutes 
$795,476 in Airport Revenues for General Fund Reserve 
monies). 

2. The proposed amendment to the supplemental 
appropriation, which would transfer funds from the Police 
Department to the Fire Department in the amount of 
$1,200,000 to pay for Fire Department suppression services at 
Treasure Island in order to avoid a deficit for Treasure Island, 
would have the same practical effect of the Police Department 
making the sublease payment directly to Treasure Island. The 
Budget Analyst considers the Controller's amendment 
regarding this $1,200,000 transfer to be a policy matter for the 
Board of Supervisors because the Finance Committee has not 
yet approved the Police Department's sublease agreement (File 
01-0944) with Treasure Island. 

1. Approve the proposed supplemental appropriation of 
$2,160,476 (a reduction of $830,791) from the following 
sources: 

Airport Revenues $795,476 

Increased Fire Inspection Services Revenue 505,000 

Increased Fire Plan Checking Revenue 360,000 

Increased Paramedic Services Revenue 500.000 

Total $2,160,476 

2. Approval of the appropriation to the Fire Department of 
$1,200,000 in funds currently budgeted in the Police 
Department for the Police Department's FY 2000-2001 
sublease pajmient to Treasure Island is a policy matter for the 
Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



BLANK 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

49. 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Item 6 - File 01-0815 

Note: This item was continued by the Finance Committee at its meeting of 
May 23, 2001. 



Department: 
Item: 

Location: 
Lessor: 



Lessee: 

No. of Sq. Ft. and 
Monthly Rental: 



Annual Rent: 
Term of Lease: 
Right of Renewal: 

Source of Funds: 
Lessor Services: 



Department of Administrative Services 
Department of Elections 

Resolution approving a new lease of real property 
located at 1667 Market Street on behalf of the 
Department of Administrative Services, for the 
Department of Elections. 

1667 Market Street, at Gough Street 

The Kerson Family Trust/ Silberstein & 
Constantine Holdings, LLC 

Department of Elections 



18,500 square feet at a monthly rent of $57,291.67 
per month (approximately $3.10 per square foot per 
month). 

$687,500 annually at the same rate for all five 
years of this proposed lease. 

Five years, beginning approximately September 1, 
2001 

Option to renew for an additional five years at 95 
percent of the then fair market value, as 
determined by independent appraisals obtained by 
the Division of Real Estate and the lessor. 

General Fund to be included in the FY 2001-2002 
budget of the Department of Elections 

Lessor would be responsible for taxes, insurance, 
maintenance of the structural components of the 
building (i.e., roof, foundation, exterior, etc.) and 
HVAC and elevator maintenance as well as 
janitorial, water, sewer, trash and miscellaneous 
repairs. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

43 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Lessee 

Responsibilities: The City would be responsible for the Department's 

pro rata share of any increase in the Lessor's 
operating costs in excess of the 2002 base year. In 
addition, the City would be responsible for gas and 
electrical services and any other direct operational 
costs of the Department within the premises. 

Tenant Improvements: The proposed resolution would require the Lessor 

to construct and pay for tenant improvements, as 
requested by the City, of up to $650,000. The City 
would be required to pay for any requested tenant 
improvements exceeding $650,000. The subject 
lease also states that if the tenant improvements 
cost less than $650,000, the Lessor would pay the 
differential amount of up to $650,000 to the 
Department of Elections to offset their costs 
associated with relocation to the new facility (See 
Comment No. 3). 

Comments: 1. According to Mr. Ara Minasian of the 

Department of Administrative Services, there are 
currently 16 FTE staff (8 Permanent positions and 
8 Temporary positions) employed in the 
Department of Elections. The Department of 
Elections FY 2000-2001 budget authorizes 39 FTE 
staff (15 Permanent positions and 24 Temporary 
positions). Mr. Minasian advises that during a Fall 
election season, which extends from approximately 
September through early January, the Department 
hires additional Temporary staff, expanding up to 
126 additional employees. 

Mr. Minasian advises that the Department has 
proposed an expansion of the existing 15 FTE 
Permanent positions to 24.75 FTE Permanent 
positions, an increase of 9.75 new FTE Permanent 
positions in the upcoming FY 2001-2002 budget. 
According to Mr. Minasian, it is anticipated that 
the level of Temporary staffing will remain the 
same, at approximately 24 FTE Temporary 
positions, although the funding for such Temporary 
positions is anticipated to increase by $50,000 from 
$850,000 in the current fiscal year to $900,000 in 
FY 2001-2002, due to an adjustment in the pay 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

44 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



scales for such employees. Overall, the current 39 
FTE staff is therefore requested to increase to 
48.75 FTE staff. According to Ms. Taylor Emerson 
of the Mayor's Office, the Mayor's proposed FY 
2001-2002 budget is anticipated to include these 
48.75 FTE positions and an additional $396,638 for 
salaries for the Department of Elections. 

2. As discussed in Attachment I, provided by Ms. 
Mary Hobson of the City Architects Office, the 
Department of Elections currently occupies 12,790 
square feet of ground floor of space in City Hall on 
a year-round basis. This 12,790 square feet of space 
includes two large ballot storage rooms, comprising 
a total of 2,090 square feet, that were originally 
used by City Hall Building Operations to store City 
Hall building supplies (i.e., paper towels, toilet 
paper, heat pumps, air filters, etc.). According to 
Ms. Emerson, the purchase of City Hall building 
supplies has been reduced and such supplies are 
currently being temporarily stored throughout the 
basement of City Hall, which reduces the efficiency 
of the building's operations. 

3. The proposed resolution would approve a new 
lease for 18,500 square feet of office and storage 
space for the Department of Elections, on a year- 
round basis. Therefore, the proposed lease would 
provide 5,710 square feet of additional office and 
storage space for the Department (18,500 square 
feet proposed less 12,790 square feet existing 
space). 

In addition, the Department currently rents 
approximately 7,000 square feet of warehouse 
space at Pier 29 from the Port at a cost of 
approximately $5,600 per month ($67,200 
annually) for storing old ballots and equipment 
needed on election days. The Department advises 
that if the proposed new lease is approved, the 
Department would still require the Pier 29 
warehouse space for additional storage purposes. 

Ms. Emerson advises that during the November of 
2001 election period, the Election Department's 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

45 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

activities expanded to additional conference rooms, 
the basement corridors, and adjacent hallways for a 
total of an additional 7,720 square feet of space. 
According to Ms. Christiane Hayashi of the 
Department of Elections, during the November of 
2000 elections, the Department also rented 
additional space for two days at Bill Graham 
Auditorium and for approximately two to three 
weeks at Brooks Hall. Mr. Minasian advises that, 
since this space was available, the Convention 
Facilities Division provided this space to the 
Department of Elections at no additional cost. 
These additional facilities were required to 
assemble the ballots, canvass each of the precincts 
and fully review the counts. Mr. Philip Paris of the 
Department of Elections advises that, if the 
proposed new lease is approved, the Department 
would not need to rent any additional space during 
the election period, as was previously necessary. 

Ms Hayashi advises that using these temporary 
faculties that were not immediately adjacent to the 
Department's offices, as well as using various other 
cramped spaces in City Hall resulted in significant 
additional staff time and inefficiencies that would 
not occur if the Department's offices and assembly 
space were located together. In addition, Ms. 
Emerson notes that the Department was required 
to spend approximately $75,000 to repair the tile 
and historic marble that was damaged by the 
Election Department's equipment and activities 
that occurred in the corridors of City Hall. Ms. 
Hayashi advises that although a substantial 
amount of staff time was unnecessarily expended 
because of insufficient space available for the 
Department of Elections, she cannot estimate the 
amount of additional time and costs that were 
expended. Ms. Emerson advises that the proposed 
FY 2001-2002 budget assumes that staffing 
efficiencies will occur with this new lease, although 
the exact amount cannot be quantified as of the 
writing of this report. 

As indicated in Attachment I, the Department has 
also requested that if the proposed new lease is 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

46 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



approved, that approximately 800 square feet of 
office space be maintained for the Department of 
Elections in City Hall to facilitate public access for 
the Department. 

If the proposed 18,500 square foot lease is 
approved, and the Department retains the 7,000 
square foot warehouse space on Pier 29 and 
maintains an 800 square foot office in City Hall, 
the Department of Elections total office and storage 
space would be 26,300 square feet. As discussed 
above, the Department currently has a total of 
19,790 square feet of office and storage space 
(12,790 square feet in City Hall and 7,000 square 
feet on Pier 29). Therefore, the total proposed office 
and storage space for the Department would 
increase from 19,790 square feet to 26,300 square 
feet, an increase of 6,510 square feet, or a 32.9 
percent increase on an ongoing basis. Ms. Emerson 
notes that, as indicated above, the Department of 
Elections also required an additional 7,720 square 
feet of space during the November of 2000 election 
period, such that according to Ms. Emerson's 
calculations, the subject lease actually results in a 
loss of 1,210 square feet. However, the Budget 
Analyst notes that the additional 7,720 square feet 
of space was not needed for the entire year, but 
only during the height of the election season and 
the additional 7,720 square feet of space did not 
result in any additional rental expenses for the 
City, such that the proposed lease will result in an 
increase of 6,510 square feet, or a 32.9 percent 
increase and an additional annual cost of $687,500 
on an ongoing basis. 

4. Attachment II, provided by the Mayor's Office 
shows a preliminary relocation project budget of 
$1,140,000, of which $607,750 is for tenant 
improvements and $42,250 for Design/Coordination 
services, which total $650,000. This amount of 
$650,000 would be paid by the Lessor. As of the 
writing of this report, the Department does not 
have detailed cost estimates for the proposed 
$650,000. Ms. Hobson advises that she anticipates 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

47 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

receiving detailed cost estimates from the 
contractor by May 18, 2001. 

As shown in Attachment II, the Department 
anticipates that as part of the total estimated 
relocation budget of $1,140,000, an estimated 
$490,000 would be required to complete the move, 
including funds for Space Planning and Furniture 1 
($117,000), Moving costs ($10,000), Project 
Management ($13,000) and Data/Voice Wiring and 
Equipment ($350,000). This estimated $490,000 
would need to be funded with General Fund 
revenues. Mr. Minasian advises that, although the 
proposed budget as shown in Attachment II 
identifies $350,000 for the Department of 
Telecommunications and Information Services 
(DTIS), DTIS has advised the Department of 
Elections that the actual cost will be approximately 
$600,000, or $250,000 more than shown on 
Attachment II, for all of the telecommunications, 
data wiring, new PacBell lines and wire 
connections to City Hall that would be required to 
make the new Department of Elections space fully 
operational. However, as of the writing of this 
report, DTIS could not provide detailed cost 
estimates to the Budget Analyst. 

Therefore, the Budget Analyst notes that the 
proposed total relocation budget for the 
Department of Elections would be $1,390,000 
($1,140,000 as shown in Attachment II, plus 
$250,000 for DTIS), of which the lessor would pay 
for $650,000, such that the City would be 
responsible for funding $740,000 of one-time 
expenses from the General Fund. Ms. Emerson 
advises that any additional DTIS costs, not 
included in Attachment II, would need to be funded 
through DTIS's annual $1 million Citywide 
allocation for telephone services. Ms. Emerson 
advises that, if the proposed lease is approved, the 
Mayor's Office anticipates including $572,917 



1 All furniture purchased for City Hall is required to stay in City Hall, such that the 
Department of Elections would not be permitted to move any of their existing furniture to the 
new lease site. 

BOARD OF SUPERVISORS 
BUDGE^ ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

(based on an estimated ten months of occupancy 
from September 1, 2001 through June 30, 2002) for 
the new lease costs and $490,000 for the one-time 
improvements, or total costs of $1,062,917 in the 
Department of Elections FY 2001-2002 budget. 

5. Mr. Steve Legnitto of the Department of Real 
Estate advises that the proposed office space 
includes two floors plus the mezzanine in the 
building at 1667 Market Street. According to Mr. 
Legnitto, the proposed monthly rental rate of $3.10 
per square foot, or $37.20 annually per square foot 
represents the current fair market value for the 
subject property. According to Mr. Legnitto, the 
original lease was to extend for ten years, but, the 
lease was reduced to the proposed period of five 
years, in order to enable the Department of 
Elections to potentially relocate after five years to a 
City-owned facility. 

6. Mr. Paris advises that if the proposed resolution 
is approved, the Department would move into the 
proposed new space in early September of 2001, 
resulting in 10 months of rent for FY 2001-2002. 
According to Mr. Paris, this move would enable the 
Department to be fully operational in the new 
space for the November of 2001 election. 

7. According to Ms. Hobson, if the proposed lease is 
approved, it has not yet been decided who will 
move into the Department of Elections current 
space in City Hall. Of the 12,790 square feet of 
space currently occupied by the Department of 
Elections, 2,090 square feet would be used by City 
Hall Building Operations for storage of building 
supplies and according to Ms. Hobson, 800 square 
feet of space is being requested by the Department 
of Elections, leaving a balance of 9,900 square feet 
of space. Ms. Emerson advises that decisions about 
backfilling the space at City Hall would have to 
consider: (1) individual City department space 
needs, (2) appropriate fit of the existing space with 
workflow and public interaction, and the (3) 
potential for reduced expenditures in existing City 
leases. If a City Department moves from existing 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

leased space to City Hall, there would be a savings, 
potentially to the City's General Fund, for such 
leased expenses, which could partially or fully 
offset the proposed increased relocation costs for 
the Department of Elections. However, an estimate 
of such offset savings is not known at this time and 
it is not known at this time if any department 
plans to leave their existing leased facility and 
move into the Department of Elections current 
basement space in City Hall, according to Ms. 
Emerson. 

8. In summary, the proposed resolution would 
authorize the Department of Elections to lease 
18,500 square feet of space at 1667 Market Street 
and to move out of the 12,790 square feet of space 
in the basement of City Hall. The annual rental 
costs of the new lease would be $687,500. The 
Department does not currently pay for use of City 
Hall space. In addition, one-time costs of up to 
$1,390,000 are projected, of which the landlord 
would pay $650,000 and the remaining $740,000 
would be a City expense. Of the City's $740,000 
obligation, $490,000 would be new General Fund 
expenses and the remaining $250,000 would be 
paid from DTIS's $1 million annual appropriation 
for City-wide telephone services. There could be 
some offset of existing leased costs if another 
General Fund department relocates from leased 
space and is transferred into the current 
Department of Elections space in City Hall. 
However, as of the writing of this report, there is no 
estimate of such offset savings in leased costs or 
whether any department will vacate their existing 
leased space. 

Recommendation: Approval of the proposed new lease for the 

Department of Elections is a policy matter for the 
Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

50 




Attachment I 
Page 1 of 1 

OFFICE OF THE CITY ARCHITECT 



WILLIE L. BROWN, JR. 
MAYOR 

ANTHONY E. IRONS 
CITY ARCHITECT 



Memorandum 

To: Taylor Emerson 

From: Mary Hobson 

Date: May 2, 2001 

Subject: Evaluation of the Assessor's Office as a Possible Back-fill Tenant 

for City Hall Office Space Vacated by the Department of Elections 

The Department of Elections currently occupies 12,790 square feet of ground floor office 
space in City Hall on a year-round basis. The department will vacate this area when it 
relocates later this year. 

Included in the 12,790 square feet of Elections space, are two large ballot storage rooms 
originally utilized by City Hall Building Operations to store building supplies. It is 
recommended that these two rooms be returned to their original function. This will reduce 
the available space to be back-filled by other City departments to 10,700 square feet. In 
addition, it is the request of the Department of Election that approximately 800 square feet 
of office space be reserved by them for use as a satellite office to facilitate public access. 

The area available is currently broken into 17 individual rooms. The space has two 
reception areas, three private offices, one conference room, one public access file room, 2 
secured file storage rooms, and 7 rooms containing open office designed to accommodate 
approximately 35 people. 

At your request I have completed a brief study of whether the Assessor's Office staff 
currently located at 875 Stevenson is a good match to back fill the space. It is my opinion 
that with minor building modifications, this group could effectively use the space. It is also 
my opinion, that with space plan and furniture modifications the space could be more 
efficiently utilized. The Assessor's Office could then be accommodated within a portion of 
the available area, and the remaining space would then be available for use by another City 
department. 

Our office is in the process of identifying other possible City Departments that may be 
interested in the available space. While the Assessor's Office from 875 Stevenson is a 
possible candidate, I recommend that a more detailed evaluation be made before a final 
decision is made. I have attached is brief analysis of my findings. Please feel free to 
contact me to discuss this further. 

Cc: Ryan Brooks, Admin. Services 

Yomi Agunbiadi, City Architect's Office 

Room 495, City Hall, 1 Dr. Carlton B. Goodlet Place, San Francisco. CA 94102 Tel: (415) 554-4531 Fax: (415) 554-4509 



20 'd "TblOl 



Attachment II 
Page 1 of 1 



ELECTIONS RELOCATION 
PRELIMINARY PROJECT BUDGET 



Relocation of Elections to 1667 Market Street 


Preliminary Budget 


City Budget 
FY 00/01 FY 01/02 


Tenant Improvements TBO 


S507.750.00 


$0.00 


$0.00 


Design/Coordination Komorous Towey Architects 


$42,250.00 


S0.00 


$0.00 


Space Planning & Used Furniture Interior Motion 


$117,000.00 


$0.00 


$117,000.00 


Move Services Lynch & Sons 


$10,000.00 


$0.00 


$10,000.00 


Project Management Office of the City Architect 


$13,000.00 


50.00 


$13,000.00 


* DataA/oice Wiring & Equipment OTIS 


$350,000.00 


$0.00 


S350.000.00 




Total: 


$1,140,000.00 








Total Owner Financed: 


$650,000.00 








Total City Financed: 


$490,000.00 


$0.00 


$490,000.00 



DTIS budget is very preliminary. More accurate figures will be available after a 5/8 site tour. 



5/9/2001 
-MEOO000 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Item 7 - File 01-0836 



Department: 
Item: 

Description: 



Department of Administrative Services 
Department of Elections 

Hearing to consider release of reserved funds in the 
amount of $800,000 to purchase equipment and 
$251,000 for non-personal services for the 
Department of Elections for a total of $1,051,000. 

On April 23, 2001, the Board of Supervisors 
approved a supplemental appropriation (File 01- 
0249) for the Department of Elections in the 
amount of $2,411,887 to fund cost overruns that 
resulted from the November and December of 2000 
elections. Of the $2,411,887 approved, the Finance 
Committee reserved $800,000 to complete the 
purchase of the optical scan voting technology 
system equipment and $251,000 for the remaining 
service fee payments on the optical scan voting 
technology system equipment. These funds were 
placed on reserve by the Finance Committee 
because at the time the requested supplemental 
appropriation was approved, the Department of 
Elections was in the midst of negotiations with the 
optical scan voting technology system vendor, 
Elections Systems and Software, Inc. (ES&S), 
regarding (1) whether the City should complete the 
purchase or alternatively lease the optical scan 
voting technology system; and (2) whether there 
was contract nonperformance by ES&S during the 
November and December of 2000 elections. 

In April of 2001, when the supplemental 
appropriation was approved, Ms. Christiane 
Hayashi of the Department of Elections advised the 
Budget Analyst that she was continuing to 
negotiate with ES&S regarding contract 
modifications in order to preserve the Department's 
flexibility in the future, when the Department 
plans to upgrade to touch-screen voting, estimated 
to cost approximately $10 to $12 million. Therefore, 
although the Department had originally proposed 
to purchase the optical scan voting technology 
system from ES&S, the Department wanted to 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

further analyze the option of applying the previous 
purchase payments as lease payments for the 
optical scan equipment. 

Comments: 1. The Attachment, provided by Mr. Ara Minasian 

of the Department of Administrative Services, 
explains the Department of Elections need for the 
subject requested funds totaling $1,051,000. As 
noted in the Attachment, as a result of negotiations 
between ES&S and the City, the City will need to 
proceed with the purchase, instead of a lease, of the 
optical scan technology system from ES&S because 
ES&S would not agree to change the existing 
purchase arrangements for the voting equipment, 
according to Ms. Hayashi. 

As further noted in the Attachment, the 
Department of Elections entered into a third party 
loan agreement with Norwest Investment Services, 
Inc. (Norwest) in April of 2000, to finance the 
purchase of the optical scan voting technology 
system from ES&S over a period of five years. This 
loan agreement was entered into because at the 
time the voting system project was being planned, 
during the Spring of 2000, the FY 2000-2001 
funding level for the Department of Elections' 
voting system had not yet been determined. 
Therefore, the Mayor's Budget Office and the 
Controller anticipated the need to finance the 
purchase of the system rather than purchase it 
outright, as stated in the Attachment. 

2. Ms. Theresa Alvarez of the City Attorney's Office 
advises that this third party loan agreement 
between the City and Norwest was not subject to 
the Board of Supervisors approval because it did 
not meet the City's required threshold of at least 
ten years and $10,000,000. Therefore, the Budget 
Analyst's Office has not made a detailed review of 
the subject loan agreement between the City and 
Norwest. 

3. The Mayor and the Board of Supervisors 
approved $3,241,739 of Capital Expenses in the 
Department of Elections FY 2000-2001 budget for 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

54 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



the purchase of the optical scan voting technology 
system from ESS. Therefore, Mr. Minasian advises 
that it has been the intent of the City to pay off the 
Norwest loan agreement during FY 2000-2001, 
rather than continue the loan payments over the 
original five year loan period. The proposed request 
for release of $800,000 would be used, in 
conjunction with the Department of Elections 
budgeted funds, to fully pay back the Norwest loan 
to enable the Department of Elections to complete 
this equipment purchase. 

4. In addition to the original $3,241,739 purchase 
price, the City has incurred additional net interest 
costs of $75,139, for a total principal and interest 
cost to be repaid to Norwest of $3,316,878. 
However, as noted in the Attachment, the previous 
supplemental appropriation included only $65,000 
of additional funds to pay the net interest costs. 
Therefore, $10,139 ($75,139 total net interest less 
$65,000 previously appropriated) in additional 
interest is now required. 

5. As discussed in the Attachment, based on the 
negotiations between the City and ES&S, ES&S 
has now agreed to give the City a net credit of 
$168,924. 

6. Therefore, as discussed in the Attachment, the 
Department is requesting $641,215 of the 
requested $800,000 on reserve be released, and 
that the remaining $158,785 (the $168,924 owed to 
the City by ES&S less the $10,139 in additional 
interest for the Norwest loan) should continue to be 
reserved. The $641,215 would be combined with the 
Department's existing budgeted funds of 
$3,241,739 to pay Norwest the principal and 
interest expenses in order to complete the purchase 
of the optical voter scan equipment technology 
system from ES&S. 

7. The requested $251,000 for non-personal services 
is to pay ES&S the 2001 annual service fee. In 
accordance with the agreement between ES&S and 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

the City, the City agreed to pay ES&S the following 
annual service fees: 

January 20, 2001 - $251,300 
January 20, 2002 - $145,900 
January 20, 2003 - $251,300 
January 20, 2004 - $145,900 

These fees provide for ES&S's ongoing logistical 
support, system maintenance, training, storage, 
and reporting on the optical scan voting technology 
system for the Department of Elections. Mr. 
Minasian advises that the subject ES&S agreement 
would be subject to renegotiation, if the City 
decides to purchase a touch screen voting system 
from ES&S , prior to 2004. 

Recommendations: 1. Approve the release of $641,215 out of the 

requested release of $800,000 to complete the 
purchase of the optical scan voting technology 
system. Continue to reserve the balance of 
$158,785, which can be returned to the General 
Fund. 

2. Approve the requested release of $251,000 for 
the 2001 annual service fee payment owed to 
Election Systems and Software, Inc. in accordance 
with the agreement between ES&S and the City. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 




Attachment 
_ Face 1 of 2 

DEPARTMENT OE 



ADMINISTRATIVE SERVICES 



WILLIE L. BROWN, JR. 
Mayor 

ryan L. brooks May 24, 2001 

Director 



To : Debra Newman 

From : Ara Minasian 

Subject: Information on release of reserve for Elections 



The Elections Department requests the release of reserves placed by the Board of 
Supervisors on the Elections budget as part of the recent supplemental appropriation. 
These reserves were placed pending the results of discussions with the voting system 
supplier, ES&S, to restructure the contract for the optical scan voting system from a 
purchase to a lease. As a result of these discussions, the City will need to proceed with 
the purchase of the optical scan system. ES&S has offered a proposal to upgrade the 
optical scan system to a touch screen system, which the Elections Department will be 
reviewing. Prior to considering any upgrade, however, we must complete the purchase 
of the optical scan system as contracted. 

The FY 00-01 Elections Department budget includes funds for the full purchase of the 
voting system; however, the City is under contract with a third party lessor, Norwest 
Investment Services, to lease the voting system over a five-year term. I am informed by 
Mayor's budget office and Controller's staff that, at the time the voting system project 
was being planned in the spring of 2000, the FY 00-01 funding level for the voting 
system had not been determined. It was anticipated that the City would need to finance 
the purchase of the system, rather than purchase it outright. Bids were solicited for this 
financing, and Norwest Investment Services was the successful bidder. Subsequent to 
the award of contracts to ES&S and Norwest, the Mayor's budget office determined that 
funds would be available in the FY 00-01 budget to purchase the system, and these 
funds were approved by the Board of Supervisors. 

It has therefore been the intent of the City to buy out the Norwest lease and purchase 
the voting system directly from ES&S this fiscal year. As indicated, the City has been 
engaged in negotiations with ES&S over the past several months, regarding both the 
credits that the City would receive from ES&S for performance issues in the November 
and December elections, and the potential restructuring of the purchase contract into a 
lease. Because these negotiations are completed, the City is now in a position to 
proceed with the purchase as budgeted. 

City Hall Room 362, 1 Dr. Carlton B. Goodlett Place. San Francisco, CA 94102-4683 



Attachment 
Page 2 of 2 



Debra Newman 
May 24, 2001 
Page 2 



Two factors modify the amount needed to complete the purchase from the amount 
budgeted: 

• Credit from ES&S. I am informed by Chris Hayashi that, after extensive 
negotiations, ES&S has agreed to give the City a credit of $168,924 . I do not have 
documentation regarding this amount but will attempt to obtain it. 

• Interest costs. By the time the buy out of the lease is completed, the City will have 
incurred net interest costs of approximately $75,000 for the Norwest lease. This 
represents the difference between interest charged on principal and interest 
received on funds held in escrow. The supplemental appropriation included 
$65,000 toward these net interest costs. 

The net impact of these two factors is that $1 58,785 of the $800,000 reserve is surplus, 
so that the amount requested to be released is $641,215. 

The entire $251 ,000 on reserve for services of ES&S needs to be released. I have 
provided documentation. 



Please let me know if there are any questions. 

c: Taylor Emerson 
Ryan Brooks 
Bill Lee 






Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Item 8 - File 01-0818 

Department: Treasurer and Tax Collector's Office 

Item: Resolution urging the Treasurer of the City and 

County of San Francisco to study methods of reducing 
the costs associated with the City's acceptance of credit 
cards for constituent transactions. 



Description: 



Comments: 



According to Mr. Jay Banfield of the Treasurer and 
Tax Collector's Office, the City currently accepts credit 
cards as a form of payment for various City 
transactions, including (a) payment of parking 
citations (Department of Parking and Traffic), (b) 
payment of services rendered at San Francisco 
General Hospital (Department of Public Health), (c) 
payment of permit fees (Bureau of Building Inspection) 
and (d) payment of property taxes (Tax Collector's 
Office). Mr. Banfield advises that approximately 
125,000 transactions related to payments to the City 
have been conducted with credit cards in FY 2000- 
2001. The proposed resolution states that the City 
anticipates enabling an increasing percentage of the 
public's transactions online, through the Internet, 
thereby increasing the reliance on the use of credit 
cards. 

Mr. Banfield advises that the City is currently charged 
from 1.65 to 2.25 percent of the charges for each credit 
card transaction (See Comment No. 1). Mr. Banfield 
estimates that the City's credit card merchant fees will 
total approximately $185,000 for FY 2000-2001. The 
proposed resolution would enable the Treasurer's 
Office to study various methods to reduce these credit 
card fees that are currently charged to the City. 
According to Mr. Banfield, approval of the proposed 
resolution would be a statement of support from the 
Board of Supervisors for the proposed study by the 
Treasurer's Office. 

1. Mr. Banfield advises that merchant fees are 
reduced as the volume of charges increases and/or the 
average value of transactions increases. The overall 
merchant fee is comprised of both (1) the interchange 
rate, or the fee that the credit cards charge the banks 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

and, (2) the fees that the bank charges the City. 
According to Mr. Banfield, one of the objectives of the 
proposed study would be to potentially reduce the fees 
that the banks charge to the City. 

2. According to Mr. Banfield, if the proposed resolution 
is approved, the Treasurer's Office staff would conduct 
an in-depth study and evaluation of alternative 
methods for reducing the costs of the City accepting 
credit card payments. Although Mr. Banfield cannot 
precisely estimate the amount of staff time that will be 
needed to conduct the proposed in-depth study as of 
the writing of this report, Mr. Banfield advises that 
the proposed study would not require any additional 
appropriation of funds to complete. 

Mr. Banfield estimates that the study will take six 
months to complete, and at that point, the Treasurer's 
Office would report back to the Board of Supervisors 
on the findings and results, and if appropriate, 
recommend a course of action for the City to take. 

3. Mr. Banfield reports that the Treasurer's staff 
would explore various methods for reducing credit card 
costs, such as: (1) analyzing the ability of the City to 
process its own credit cards, which would require 
detailed discussions with State regulatory officials; (2) 
discussing with third party partners or City vendors, 
that have a higher volume of credit card business, 
whether the City could negotiate a better rate through 
alternative arrangements; and (3) working with other 
municipalities to form a pool for reducing credit card 
expenses. Mr. Banfield also advises that electronic 
checks, which allow the customer to pay for services 
online via the computer, by providing bank routing 
information, bank account number, etc. currently 
impose much lower transaction fees on the City. As 
such, Mr. Banfield advises that the use of such 
electronic checks would be further explored as part of 
the proposed study. 

As noted above, after completion of the study, Mr. 
Banfield advises that the Treasurer's Office would 
report back to the Board of Supervisors on the findings 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



and results, and if appropriate, recommend a course of 
action for the City to take. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Item 9 - File 01-0835 



Department: 



Item: 



Department of Public Health (DPH) 
Department of Real Estate (DRE) 

Resolution authorizing a new five-year lease of real property 
at 1380 Howard Street for the Mental Health and the 
Community Substance Abuse Divisions of the Department of 
Public Health (DPH). 



Location: 



1380 Howard Street 



Purpose of Lease: 



Lessor: 

Lessee: 

No. of Sq. Ft. and 
Cost Per Month: 



The proposed five-year lease would replace an existing 
month-to-month lease for office space at 1380 Howard Street 
currently occupied by the Department of Public Health's 
(DPH) Mental Health and the Community Substance Abuse 
Divisions, Management and Information Systems, Mobile 
Crisis Service staff, Managed Care Division, Public Health 
Division fiscal staff, senior management staff, and the DPH 
Pharmacy. According to Ms. Judy Schutzman of the DPH, 
DPH programs and staff would remain in their current 
locations in the building, under the proposed five-year lease, 
with no increase in leased space. 

Cort Family Living Trust 

City and County of San Francisco 

Approximately 70,300 square feet at approximately $1.42 per 
square foot per month, for a total of $100,000 per month in 
rent ($1,200,000 annually). This rent of $100,000 per month 
would be fixed for the first two years of the five-year lease 
term, until July 1, 2003, at which point the rent would be 
adjusted to an amount equal to 95 percent of the prevailing 
market rate, as negotiated by the City and the lessor, 
provided that the monthly Base Rent does not exceed 
$211,000 ($2,532,000 annually), or approximately $3.00 per 
square foot. As stated in Attachment I, Mr. Steve Legnitto of 
the Division of Real Estate, Department of Administrative 
Services, advises that the City and the lessor negotiated the 
ceiling of $211,000 per month, which would be an increase of 
111 percent from the current rent of $100,000 per month, in 
order to protect the City from a potential higher increase in 
the prevailing market rental rate. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

62 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 



Annual Rent: 



Decrease From 
Previous Lease: 



$1,200,000, or approximately $17.07 per square foot, based 
on 70,300 square feet. In addition, the City would be 
required to pay to the Landlord any increases in Property 
Taxes over the base year of 1997. Ms. Schutzman advises 
that 1997 was negotiated as the base year. As stated in 
Attachment II, provided by DPH, DPH does not know how 
much the Landlord's Property Taxes have increased since 
1997. The Landlord has never billed the City for any 
increases in Property Taxes because, according to Ms. 
Schutzman, the increases have been small. The existing 
month-to-month lease contains a provision allowing the 
Landlord to bill the City for such increased costs, as stated in 
Attachment II. Ms. Schutzman states that the amount of any 
future increases is difficult to estimate. 



The current monthly rent that DPH pays for this space is 
$107,000, or $1,284,000 annually, at $1.52 per square foot 
per month based on 70,300 square feet. The proposed 
monthly rent of $100,000, or $1,200,000 per year, at $1.42 
per square foot per month, represents an annual decrease of 
$84,000, or approximately 6.5 percent. Ms. Schutzman 
advises that that DPH negotiated the $84,000 decrease in 
annual rent in order to compensate for the new requirement 
that DPH pay for all janitorial services, which are currently 
paid by the landlord under the existing month-to-month 
lease, according to Ms. Schutzman. Ms. Schutzman advises 
that DPH plans to conduct a competitive bidding process in 
June of 2001 to select a firm to provide janitorial services for 
the building. DPH is currently working with the Purchasing 
Division of the Administrative Services Department to find 
an interim contractor until the competitive bidding process is 
completed, according to Ms. Schutzman. Ms. Schutzman 
estimates that the annual cost of janitorial services for the 
subject lease will be $90,000 per year. The Budget Analyst 
notes that this estimated new cost of $90,000 for janitorial 
services would more than offset the decrease in annual rent 
under the proposed lease of $84,000. 



Utilities and 
Janitor Services: 



The City would be responsible to pay for all janitorial 
services, as discussed above, and all utilities, including 
water, electricity, and gas. The Landlord would provide at its 
sole expense daily refuse disposal services five days a week. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

63 



Description: 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

Term of Lease: The five-year lease term would begin either on June 1, 2001 

or the date of final approval of the proposed lease by the 
Board of Supervisors and the Mayor, if such approval is after 
June 1, 2001, and expire on June 30, 2006. 

Right of Renewal: None 

Source of Funds: Rent to be included in DPH's annual budgets. DPH has 
included the $1,200,000 in annual rent for Fiscal Year 2001- 
2002 in the department's budget request, according to Ms. 
Schutzman. 

As previously noted, the proposed resolution would authorize 
a new five-year lease to replace an existing month-to-month 
lease for 1380 Howard Street, with no increase in leased 
space. According to Ms. Schutzman, DPH currently leases 
part of the ground floor and the entire second, third, fourth, 
and fifth floors of the building for DPH programs. 
Specifically, a storage room and the DPH centralized 
computer training room occupy the ground floor; the DPH 
Pharmacy, Mobile Crisis Service staff, and Managed Care 
Division staff share the second floor; DPH Management and 
Information Systems staff occupy the third floor; Public 
Health Division fiscal staff and Community Substance Abuse 
Services staff share the fourth floor; and DPH senior 
management staff occupy the fifth floor. The ground floor 
space consists of 4,600 square feet, while the office space on 
the second through fifth floors has a usable area of 
approximately 65,700 square feet. The total square footage 
is therefore 70,300. According to Ms. Schutzman, these 
programs and staff would remain in place under the new 
lease. A total of 350 DPH staff currently work in the 
building, with an average of approximately 188 square feet of 
office space per employee, based on the 65,700 square feet of 
usable office space. As noted above, the unusable space 
includes the 4,600 square feet on the ground floor, which is 
comprised of a storage room and the DPH centralized 
computer training room. 



Tenant 
Improvements: 



The Landlord would install new carpet and paint to the 
interior of the premises. Under the proposed lease, the 
Landlord would pay for the first $38,000 of such 
improvements and the City would be responsible for paying 
any additional costs. However, Ms. Schutzman advises that 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

64 



Memo to Finance Committee 

May 30, 2001 Finance Committee Meeting 

DPH does not expect the cost of carpeting and painting the 
premises will exceed $38,000. In the year 2000, the Landlord 
completed $200,000 in improvements to the premises, 
including an upgrade of the building's mechanical system, 
new electrical transformers and outlets, partial roof 
replacement and roof repairs, window repairs, and a new 
card-based security system, according to Ms. Schutzman. Ms. 
Schutzman advises that the Landlord also plans to paint the 
exterior of the building at no cost to the City. 

Comments: 1. As stated in Attachment III, provided by the Division of 

Real Estate, the existing month-to-month lease for 1380 
Howard Street is based on a prior lease with the Cort Family 
Living Trust, which the Board of Supervisors approved in 
May of 1998 (File 98-741). After continued negotiations, the 
two parties agreed to the provisions in the subject proposed 
new five-year lease in May of 2001, according to Ms. 
Schutzman. During this approximate three-year period of 
negotiations, from 1998 to 2001, the Cort Family Living 
Trust allowed DPH to continue occupying 1380 Howard 
Street on a month-to-month basis, under the provisions of 
the previously approved lease. Therefore, from July 1, 1998 
through the present, DPH has paid to the Cort Family Living 
Trust monthly rent of $107,000 ($1,284,000 annually). 

2. According to Mr. Julian Sutherland of the Division of Real 
Estate, Department of Administrative Services, the proposed 
rent for the subject lease of $1.42 per square foot per month 
represents fair market value. 

3. As noted previously, DPH occupies a total of 70,300 square 
feet at 1380 Howard Street. The Department of Parking and 
Traffic (DPT) occupies the balance of the building 
(approximately 9,650 square feet) under the terms of a 
separate lease .approved by the Board of Supervisors in 
August if 1995 for the period from November 11, 1995 
through June 30, 2006. According to Mr. Sutherland, DPT 
currently pays rent of $9,875.08 per month ($118,501 
annually), or approximately $1.02 per square foot per month, 
based on 9,650 square feet. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

65 



City and County of San Francisco 




Attachment I 

Real Estate Division 
Administrative Services Department 



MEMORAND UM 



DATE: 


May 24, 2001 


TO: 


Budget Analyst 


FROM: 


Steve Legnitto \l*^' 
Acting Director of Property 



SUBJECT: 1380 Howard Street Lease 



In response to your request we are providing the following information: 



This particular lease calls for a rent increase on July 1, 2003. The amount of the increase is suppose to 
be adjusted to 95% of the then fair market value not to exceed a dollar cap of S21 1,000 per month. Thi 
dollar cap breaks out to a leasing rate of $3.00 per square foot per month and was negotiated at a time 
when the commercial real estate leasing market was more favorable than today. 

This figure was a projection based upon what staff believed the market to be in 2003. Our current 
assessment is that this rent cap will be much lower than actual market value in 2003. Therefore, this 
provision will most likely result in saving the city rent dollars in the year 2003. 



(415) 554-8850 
FAX: (415) 552-9216 



Office of the Director of Property 
25 Van Ness Avenue, Suite 400 



San Francisco, CA 

TOTAL P. 02 



66 



Attachment 11 




Mty ana county of San Francisco 
Department of Public Health 
Population Health & Prevention 

COMMUNITY MENTAL HEALTH SERVICES 



Judith Schutzman, MPA 
Operations Manager 

1380 Howard Street, 5th Floor 

San Francisco, CA 94103-2514 

(415)255-3406 FAX (415)252-3015 

Judy_Schutzman@dprt.sf.ca-us 





MEMORANDUM 


Date: 


May 23, 2001 


To: 


Harvey Rose 

Board of Supervisors' Budget Analyst 


From: 


Judy Schutzman ^K 


Subject: - 


File #01-0835, 1380 Howard Street 



The proposed lease for 1380 Howard Street provides for a pass-through of the 
increase in real property taxes over the base year 1997-98. This memo will confirm that 
the owner has never billed us for any increase in property taxes during the 13 years the 
Department of Public Health has occupied the building. The previous lease also had a 
provision for such a pass-through. Since we were never billed for any increases, I do 
not know how much they were in prior years. 

The owner verbally stated that the increases were so small, approximately $250 last 
year, that they do not intend to pass them through in the future. 

If you have additional questions, please let me know. 

Cc: Julian Sutherland, RED 



A7 



uity and County of San Francisco 




Attachment ill 
Page 1 ot 3 

Real Estate Division 
Administrative Services Departme 



May 10, 2001 



Lease of Real Property 
1380 Howard Street 
Mental Health Services 
Department of Public Health 

Through Ryan Brooks, Director 

Administrative Services Department 

Honorable Board of Supervisors 
City and County of San Francisco 
401 Van Ness Avenue 
San Francisco, C A 94102 

Dear Board Members: 

We recommend your approval of the attached proposed Resolution authorizing a lease of real } 
property at 1380 Howard Street on behalf of City, as Lessee, for the use of the Mental Health 
Division (MHD) of the Department of Public Health. The proposed location is. at the 
northeast corner of Tenth and Howard Streets. 

Mental Health Administration and various Public Health units have occupied portions of 1380 
Howard Street since 1988 under the terms of three separate leases, two of which expired June 
30, 1998. The third lease was on a month-to-month basis at that time. 

In March 1998, at the request of the Department of Public Health, the Real Estate Division 
negotiated an agreement in principle with the Landlord, The Cort Family Living Trust, to 
lease 70,300 rentable square feet of office space. The Real Estate Division with the assistance 
of the City Attorney's office drafted a lease based on the terms contained in the agreement and 
submitted the draft lease for the consideration by the Board of Supervisors. On May 26, 1998, 
Resolution 421-98 was adopted by the Board, and was approved by the Mayor on June 5, 
1998. 

The new lease was not finalized by the June 30, 1998 expiration as set forth in the agreement. 
However, at his own risk, the Landlord commenced work to construct certain leasehold 
improvements as set forth in the agreement while continuing to negotiate the final lease. 
Acting in good faith, and in order to enable the Landlord to continue with the leasehold 
improvement work, payment of the 5107,000 per month rent as authorized in Resolution 421- 
98 was instituted effective September of 1998. In November of 1998, although much of the 
leasehold improvement work had been completed, and the City was paying the new agreed 
upon rent, lease negotiations deteriorated to the point of an impasse. 



415)554-9850 

-AY- fd1=^ CCO.OTic 



Office of the Director of Property 
68 



ALL.acnmei.iL j-j.. 
Page Z or J 



Lease: 1380 Howard Street 
Mental Healt